Gustaf Hoffstedt: Is fragmentation undermining the EU market?
In December 2017, the European Commission quietly announced it was withdrawing from all legal proceedings related to gambling regulation. From that point forward, disputes would be left entirely to individual member states.
It was a stunning reversal. Just a few years earlier, the Commission had actively challenged national gambling monopolies for violating EU internal market rules, arguing that many member states prioritised state-run gambling revenues over fair competition and consumer protection. In 2014, the Commission even launched legal action against Sweden for maintaining its state-controlled monopoly.
The Commission’s involvement mattered. It kept national governments in check, preventing them from favouring domestic operators at the expense of competition. Being part of the EU – or in Norway’s case, the European Free Trade Association (EFTA) – comes with obligations, chief among them the commitment to uphold the four fundamental freedoms: The free movement of goods, services, people and capital.
When Sweden faced the prospect of being taken to the European Court of Justice, the Government acted swiftly. A century-old gambling monopoly was replaced with a non-discriminatory licensing system. Channelisation rates surged from 50% to 90% (why it later dropped to 75% is another story). The new system wasn’t perfect, but it was a vast improvement –bringing order to the market, generating new tax revenues and ensuring consumer protections actually reached players.
Fast forward to 2025 and the European Commission is nowhere to be found. Meanwhile, countries like Austria and Norway are openly undermining the EU’s internal market. Norwegian authorities are restricting citizens from accessing Europe’s gambling offerings, despite clear legal rights for consumers to use services from operators based in other EEA countries.
In Austria, the situation is even more troubling. The judiciary is being weaponised against foreign gambling operators, particularly those based in Malta. Austrian courts are forcing these companies to refund customer losses –not due to fraud, unfair odds or manipulated RNGs (random number generators), but simply because Austria has granted itself an exclusive gambling monopoly.
The legal logic behind these rulings is absurd. Players who voluntarily chose to gamble with these companies are being reimbursed because the operators lacked an Austrian licence –something impossible to obtain by design. Yet, unsurprisingly, no lawsuits have been filed demanding that winnings be annulled.
Enter Malta’s Bill 55, a law designed to shield Malta-based gambling operators from foreign court rulings that contradict EU principles, preventing their assets from being seized in cases like those in Austria.
Now Austria is asking: Where is the EU?
Why aren’t Austrian court rulings being enforced across the Union? It’s a fair question, given that member states are legally obligated to uphold each other’s court decisions. But an even bigger question remains: Where was the EU when Austria violated internal market rules in the first place? By stepping away from gambling regulation in 2017, the Commission created a vacuum. Member states seeking to maintain protectionist gambling monopolies were given free rein, while operators who followed EU rules were left in legal limbo. The result? A fragmented and inconsistent regulatory landscape where fundamental EU principles are treated as optional. No one benefits from this disorder.
Austria is frustrated that its court rulings aren’t enforced elsewhere. Gambling operators who comply with EU regulations face uncertainty and arbitrary restrictions. Consumers, meanwhile, are caught in the crossfire –left with fewer legal protections and limited access to regulated gambling services. This is not how the EU is supposed to function.
It’s time for the European Commission to re-engage and enforce the very principles that underpin the internal market. The same goes for the EFTA Court. These institutions must defend the agreements that Sweden signed in the 1960s –agreements that eventually led to our EU accession in 1995, alongside Austria.
I love the EU and what I love most is its greatest strength: The free movement of people, goods, services and capital. These freedoms are what make the Union work. It would be a relief to see the Commission rediscover this core value –especially at a time when other global actors are erecting new trade barriers.
The EU has been on the sidelines for too long. It’s time to step back into the game.
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