The European Gambling and Amusement Federation (EUROMAT) has lodged an objection to Croatia’s sweeping changes to gaming regulation, claiming lawmakers have incorrectly failed to notify the European Commission.
Among the measures outlined by Croatia’s parliament include new player protection rules, tightening rules on gambling venues and advertising, as well as increasing licensing fees and taxation.
EUROMAT argues that several of the proposed amendments qualify for EU Directive 2015/1535, or the Technical Regulation Information System (TRIS) procedures. A policy designed to prevent technical barriers to trade within the EU.
Under the directive, member states must notify the European Commission of any draft technical regulations that restrict market access or the provision of services. Failure to do so can result in the suspension of the law’s application and the initiation of infringement proceedings.
EUROMAT President Jason Frost urged the European Commission to intervene to avoid setting a “concerning precedent”.
He stated: “Companies need legal certainty to invest and operate in Europe, and if the Commission allows Member States to disregard their responsibilities, then it sets a very concerning precedent.”
The European Commission was previously notified of proposed changes to regulation by the Croatian government in both 2014 and 2023.
In the case of the former, Croatia was forced to withdraw its gambling law following scrutiny from the commission, an action Frost notes “underlines how important the notification procedure is”.
More recently, the European Court, in a landmark ruling that could set a precedent for Croatia, stated that the widespread rule changes around gambling promotions in Lithuania were unenforceable.
The courts took issue with the notification that the government provided to the European Commission, siding with the operator Unigames, who had been sanctioned for several breaches related to the new rules in Lithuania.
As a result, the court ruled that the lack of notification constituted a substantial procedural defect in the adoption of the technical regulations, meaning they are unenforceable against operators in their current guise.
Croatia’s new approach
The proposals come amidst promises from the Croatian government and Prime Minister Andrej Plenković to clean up the country’s gambling ecosystem and tighten the framework of the country’s gambling sector.
Under the new measures, identification processes will be at the heart of strengthened player protection measures, alongside a focus on steps to ensure underage viewers are not exposed to online marketing campaigns from operators.
Further deepening the crackdown on marketing, Gambling adverts will no longer be allowed to feature celebrities, athletes, or social media influencers to promote brands, services or endorsements.
Perhaps most notably, if implemented, gambling tax will spike, with a new framework being implemented based on the winnings and business scale. For example, a 30% fee will be leveraged on winnings over €70,000.
Additionally, licensing fees across retail betting shops, land-based casinos and internet casinos will also increase.
Given the scale of the changes and the potential impact on operators across the jurisdiction, the lack of notification has angered some within the industry.
Filip Jelavic, General Secretary of the Croatian Gaming Association, said: “It is inconceivable that any European Member State could be allowed to introduce such far-reaching and disruptive legal changes without following the correct procedure.
“We are calling on the Croatian Government to act responsibly in this case and follow the law.”
