Lithuania’s aggressive push to tighten online gambling regulations has suffered a surprise setback following a ruling by the Court of Justice of the European Union (CJEU) that declared key amendments to the nation’s gambling law to be non-enforceable due to procedural failures. This apparent oversight by Lithuanian legislators could significantly affect the nation’s efforts to reign in its gambling sector.
Lithuanian Legislators Made a Fatal Misstep
The ruling relates to a case brought by online gambling operator Unigames against Lithuania’s Gambling Supervisory Authority. It determined that Lithuania failed to properly notify the European Commission of the amendments, violating EU law and rendering the changes inapplicable against operators. This decision could potentially jeopardize the Lithuanian regulator’s enforcement actions.
A breach of the notification obligation… constitutes a substantial procedural defect… and renders those technical regulations… unenforceable against individuals.
Court of Justice of the European Union statement
Lithuania’s 2021 revision of Article 10(19) of its gambling law lies at the heart of the dispute. The updated legislation expanded restrictions on gambling promotion to include “any form and by any means” of advertising or encouragement. Under the new rules, Unigames was fined €12,662 ($13,860) for website content that regulators deemed to encourage gambling participation.
Despite the regulator ostensibly having the jurisdiction to enforce these updated rules, the newest ruling noted that the amendment constituted a “technical regulation” under EU Directive 2015/1535. Therefore, Lithuania was legally obliged to notify the European Commission before implementing it. Because it failed to do so, the regulations are now unenforceable.
This Ruling Could Severely Undermine Gambling Reforms
The Supreme Administrative Court of Lithuania must now consider the CJEU ruling when determining whether to overturn Unigames’ fine, setting a precedent that could affect other regulatory actions taken under the contested amendments. The decision could seriously impede Lithuania’s recent push to rein in its gambling industry via targeted overhauls of its outdated gambling-related legislation.
The Lithuanian government has pursued increasingly strict measures, including blocking ads from unauthorized gambling operators, blocking credit/debit card payments to unlicensed gambling sites, and raising the age limit for legal gambling to 21. The country also introduced new licensing fees for gambling operators in 2024 and will implement a full ban on gambling advertising in July 2025.
Earlier this month, Lithuania imposed an €8.4 million ($9.2 million) fine on Olympic Casino Group Baltija following a high-profile embezzlement scandal. However, the CJEU ruling could jeopardize the nation’s ability to continue enforcing its gambling restrictions without running afoul of EU law. Moving forward, Lithuania may need to revisit its legislative process to align with EU requirements before implementing further gambling reforms.
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