Schleswig-Holstein intends to maintain all online gambling licences issued under its Gambling Act, it has confirmed.
The coalition government in the German federal state included the language in its legislative package for the approval of the federal Interstate Gambling Treaty (ITG) and its incorporation into regional state law, which will have its first reading in the Schleswig-Holstein parliament next week.
But while the two bills strip away and replace almost all of the provisions of Schleswig-Holstein’s Gambling Act with those of the Interstate Treaty, lawyer Henrik Armah of Olswang has highlighted that these “[do] not contain details about how [Schleswig-Holstein] licences shall be implemented into the ITG”, raising further questions over the applicability of these licences within Germany should SH accede to the ITG as planned. Operators have also only been given until noon on 4 September to submit applications for up to 20 sports betting licences to be issued under the Treaty, covering 14 of the other 15 German federal states, or Länder.
Germany’s northermost Land has issued online sports betting licences, each valid for six years, to seven companies – including bwin, Betfair and bet365 – and has admitted it is powerless to prevent the issue of further permits, potentially including Germany’s first for online poker and casino, while the law is still in place.
Armah also pointed out that the legislative process for Schleswig-Holstein to approve its bills to abolish its Gambling Law and opt the Land back into the Interstate Treaty, ahead of the drafts being notified to the European Commission, “might easily take a couple of months”. The other parties in the ruling coalition, the Greens and SSW, have also put the brakes on SPD efforts to expedite the bills through the parliament, due to concerns over being sued for damages by existing and potential licence holders. Both of these factors increase the potential time frame for online poker and casino licences to be issued in Schleswig-Holstein, undermining the ban on these products under the ITG ratified by 14 of the other 16 Länder.
Two of Schleswig-Holstein’s existing licence holders, bwin.party and MyBet, are already exerting legal pressure on the state government to issue online poker and casino licences, lodging a specifc type of legal action in the Adminstrative Court to force the government into fulfilling its legal obligation to issue these permits to bwin and mybet.
With online poker and casino remaining unregulated by the ITG, which replaced the previous state monopoly on sports betting with a restricted opening for sports betting based on a prohibitive 5% turnover tax on all sports bets, Schleswig-Holstein would be able to levy and collect taxes on these products should it issue relevant licences in the time it takes to repeal its Gambling Act.
Schleswig-Holstein was no longer able to levy and collect taxes on sports bets from 1 July when the ITG came into force, due to a clause in its own Gambling Act that stipulated “gaming duty shall not be levied on … lotteries and betting that are subject to taxation under the [federal] Betting and Lotteries Act.”