Lithuania: incompatible laws notified to the European Commission – what next?

The Republic of Lithuania has notified proposed amendments to its Gambling Law to the European Commission, which limit licences to those entities established in Lithuania.

The Government claims that the current law does not “clearly establish that entities which have the right to organise betting may organise said services through means of communication. Currently, de facto betting through means of communication has become widespread practice and entities organising games of chance in this manner that do not obtain licences for doing so, as required by the provisions of the Republic of Lithuania Gambling Law, are thus acting illegally under Lithuanian gaming law”.

As part of the notification, the Lithuanian Government said that “as a result, companies operating in Lithuania that comply with the provisions find themselves in a disadvantageous competitive position. This legal loophole must be closed as a matter of urgency”.

The proposed solution is to introduce a licensing regime for remote gambling. However, the law would only allow those “Companies” that are registered entities within Lithuania to apply for and hold licences.

This restriction is in clear contravention of the ECJ decision in Engelmann. And yet, the Commission has, so far, taken no visible action against other Member States who continue to operate regimes that, similarly, require a local company to hold a licence.

It will be interesting to see if the Commission takes this opportunity to put a marker in the sand when responding to Lithuania and then, if the Lithuanians chose to ignore the Commission, what it does then. The Lithuanian notification can be read here.