The Court of Justice of the European Union (CJEU) has ruled that Lithuania did not adhere to correct legal processes when it enforced its broad prohibition on gambling advertising, which has created a significant legal hurdle for the country. This verdict has broader ramifications for regulatory control in Europe’s online betting business, including in the UK, and casts doubt on the ban’s validity.
Stemming from a challenge by online gambling operator Unigames, the CJEU found that Lithuania had not notified the European Commission before implementing amendments to its gambling laws. This is a requirement under EU law for technical regulations that impact digital services. The court’s decision rendered the prohibitions unenforceable against companies, undermining Lithuania’s hard line on gambling promotion.
How This Unfolded
The legal dispute started in 2021 when Lithuania increased the scope of its gambling ad prohibition to include almost all types of marketing, as stated in Article 10(19) of its Gambling Law. Unigames was fined €12,662 (£10,850) by the Gambling Supervisory Authority for remarks made on its website that were seen as inciting gambling. This was despite the fact that the country’s previous laws had permitted similar content.
Claiming that the Lithuanian government had broken EU legislation by not informing the European Commission before implementing the modifications, Unigames contested the verdict. The CJEU ruled in favor of Unigames, claiming that the restrictions were unenforceable due to a “substantial procedural defect” caused by this failure.
Additionally, the court made it clear that its ruling applies to both new legislation and substantial changes to current rules, thus establishing the idea that any changes affecting online gambling services must undergo a review by the European Union before they are implemented.
The Potential Implications
The matter is now back in the hands of Lithuania’s Supreme Administrative Court, which will decide whether or not to reverse Unigames’ penalties. If the decision softens Lithuania’s stringent gambling ad legislation, it would encourage operators in other highly regulated European markets to question the legality of their regulations.
Not only does this verdict impact Lithuania, but it also highlights a larger problem with how internet gaming is regulated across Europe. This case brings attention to the delicate balance between national sovereignty and EU regulatory monitoring, and it begs the issue of how countries might implement gaming prohibitions while still complying with EU law.
While the UK online gaming business adapts to the new regulatory environment, this decision sets a major precedent. The ruling may affect how other European countries handle gambling advertising bans and whether or not they have comparable legal challenges, even though Britain is no longer subject to EU regulations.
