Germany has opened its invitation to tender for the 20 sports betting licences to be issued under its new Interstate Treaty on Gambling.
The Treaty, which came into force on 1 July after being ratified by 14 of Germany’s federal states, replaced the previous state monopoly on sports betting, and levied a prohibitive 5% turnover tax on all sports bets. It also extended the ban on online poker and casino that existed under the prior four-year Treaty.
Potential licensees have only been given until noon on Tuesday 4 September to submit the relevant documents and evidence in German to the Interior Ministry in the federal state of Hesse, which has been designated as the licensing authority for the 20 sports betting concessions. The president of the Association of European Betting Companies, Markus Maul, said the tight deadline was “a method of prevention” aimed at excluding foreign operators.
Licences will not currently cover the federal states of Schleswig-Holstein or North Rhine-Westphalia, both yet to ratify the Treaty. However, “the scope of the licenses may be extended during the course of the proceedings or in the aftermath, provided the states of North Rhine-Westphalia and /or Schleswig-Holstein ratify the Treaty”, said the tender announcement.
The new ruling coalition in Schleswig-Holstein, which issued seven sports betting licences under its own Gambling Law earlier this year, has drafted bills to abolish its gambling law and opt the State back into the federal Treaty, which will receive their first reading in the federal state’s parliament from 22-24 August. However, faced with potential compensation claims from existing and/or potential licence holders, Interior Minister Andreas Breitner has admitted SH is powerless to prevent the issue of further permits, potentially including the first covering the offer of casino and poker, while the law is still in place. bwin.party and mybet are now suing SH over alleged delays in the issue of their online gaming licences, having already received their sports betting licences back in May of this year.
In addition to the tight application deadline, the tender has already drawn complaints from land-based betting operators over restrictions on how many outlets they will be able to operate both as a company and also within each federal state. These restrictions will not apply to NordwestLotto-owned sports betting company Oddset, leading to pan-European online and offline operators levelling charges of protectionism at the German federal government.
Lawyers DLA Piper also pointed out in a note that the firm designated by the Hesse Interior Ministry as legal contact for the applications, CBH Attorneys, has been for many years the main legal representative of Deutsche Lotto- und Totoblock, the association of lottery companies for the German federal states, representing a clear conflict of interest in advising other companies during the process.