Today, the General Court of the European Union rendered its verdict in the two cases concerning whether it is in accordance with the European rules on State Aid that the Danish Gambling Duties Act has imposed lower duty on online gambling providers than the duty imposed on providers of land-based casinos and amusement arcades.
The General Court dismissed both cases on the grounds that neither Dansk Automat Brancheforening (the Danish Amusement Machine Industry Association) or Royal Scandinavian Casino had the necessary legal interest in bringing the proceedings against the European Commission.
This means that the European Commission's decision confirming the Danish Gambling Duties Act as being compatible with the State Aid rules still stands.
As the European Commission's decision stands, the Danish Gambling Duties Act will not have to be changed.
However, there is the possibility that Dansk Automat Brancheforening or Royal Scandinavian Casino appeal the General Courts decision to the Court of Justice of the European Union. Such an appeal has to be made within two months.
When the Danish Parliament took steps to partly liberalise the Danish gambling market in 2010, the legislative package most notably consisted of the two bills; the bill for a Danish Gambling Act and the bill for a Danish Gambling Duties Act.
The bill for the Danish Gambling Act was notified to the European Commission under the Information Procedure Directive (Directive 98/34/EC), while the proposal for the Danish Gambling Duties Act was notified pursuant to Article 108(3) TFEU.
The main issue with the bill for the Danish Gambling Duties Act was, whether it was to be considered as State Aid, that the rules on duties were in favour of the providers of online gambling by imposing lower duty rates on them, than those laid down for providers of land-based casinos and amusement arcades.
Consequently, and in parallel, the European Commission received two separate complaints with regard to the proposed Danish Gambling Duties Act. The first complaint was submitted by Dansk Automat Brancheforening and the second complaint was submitted by Royal Scandinavian Casino, the two parties who eventually brought the Commission decision before the General Court of the European Union.
During the Commissions investigations regarding the alleged illegal state aid, the Danish Parliament argued that a model based on a uniform (and higher) rate of duty on online casinos, similar to the one applied to land-based gambling providers, would dissuade the online gambling providers from applying for a licence to provide services from Denmark, thereby preventing the objectives of the liberalisation.
In its decision of 20 September 2011 (Decision C(2011)6499), the European Commission declared that the model was to be considered State Aid within the meaning of Article 107(1) TFEU. However, the European Commission also declared that the state aid is compatible with the internal market pursuant to Article 107(3), (c) TFEU.
On the basis of this decision, the liberalisation of the Danish gambling market took effect on 1 January 2012.
Cases T-601/11 and T-615/11 before the General Court of the European Union
On 30 November 2011 Dansk Automat Brancheforening and on 6 December 2011 Royal Scandinavian Casino, brought the Commission decision before the General Court of the European Union claiming annulment of the decision. The argument was that the Danish Gambling Duties Act provided illegal State Aid to online gambling providers, and that this was not compatible with Article 107(3) (c).
Today, 26 September 2014, the General Court has rendered its verdict.
The General Court ruled that neither Dansk Automat Brancheforening nor Royal Scandinavian Casino had the necessary legal interest in bringing the proceedings against the European Commission and therefore dismissed the action.
The General Court based its dismissal on the following (T-601/11, para 52):
"[T]he applicant has not demonstrated that the consequences of the aid measure in question affects not only its members in their objective capacity as operators of offline games in Denmark in the same way as any other economic operator in the same situation, nor demonstrated the extent of the potential impact of the aid measure in question on the economic situation of its members, it has not established that the aid measure in question was liable to have a substantial adverse effect on the position of one or more of its members on the market concerned. The applicant’s members and, consequently, the applicant are therefore not individually concerned by the contested decision."
Consequently, the General Court dismissed the case. This means that the European Commission's decision from 2011 stands.