Schleswig-Holstein debate tomorrow; closes

The effective repeal of Schleswig-Holstein’s Gambling Act will be the main topic for discussion in the German federal state’s parliament tomorrow.

The coalition government’s bills are set to receive their first reading tomorrow morning, following the return of legislators from their summer break on Wednesday. The legislative package would approve the federal Interstate Gambling Treaty (ITG) ratified by 14 of the other 15 Germany federal states, or Länder, and incorporate its provisions into Schleswig-Holstein’s state law, with almost all of those of the Act pushed through by the previous CDU-FDP coalition struck out.

Germany’s northernmost Land has already issued seven online sports betting licences to private operators under the law, each valid for six years, to companies including bwin, Betfair and bet365. The Act provides for the issue of unlimited licences for all products, including poker and casino, based on a 20% gross profit tax, but Schleswig-Holstein has yet to issue any licences for these products, prompting legal action from bwin and Mybet.

The Interstate Treaty that the Schleswig-Holstein government is looking to join has been ratified by 14 of the other 15 Länder and came into force on 1 July. This levied a high 5% turnover tax on all sports bets, with the tender process for up to 20 sports betting licences under this regime opening on 8 August, with operators given only until noon on 4 September to apply.

In the event of the Schleswig-Holstein government managing to gain approval from its parliament and the European Commission for its gambling reforms, the federal state’s return to the Interstate Gambling Treaty would effectively reinstate the total ban on online poker and casino across Germany that existed under the prior four-year Treaty. The ruling SPD, Green and SSW coalition however only has a slender one-vote majority in the Parliament.

While the bills strip most of the provisions of the country’s Gambling Act away, it stops short of cancelling the existing licences issued under this legislation, aimed at deflecting costly claims for damages from existing licence holders. The bills however do not contain details of how these licences are to be implemented into the Interstate Treaty, raising questions over the applicability of these licences within Germany should Schleswig-Holstein’s government achieve its goal of accession to the common gambling Treaty.

Schleswig-Holstein was no longer able to levy and collect taxes on sports bets from its licensed operators 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.”

However, with online casino and poker currently outside the tax remit of the ITG, SH would be able to levy and collect taxes on games offered by its licensed operators should it be forced to issue online gaming licences in the time the Gambling Act remains in place.

Also in Germany, Betsson has announced the closure of its low-stakes casino. Launched in late 2009, was initally supported by an interactive phone-in TV show of the same name on freeview sweepstake channel, 9 Live. While its maximum stake of 50c per game exploited a legal loophole in German gaming law, the prevailing ban on promoting and offering online games of chance under the Interstate Gambling Treaty saw the TV show run into legal difficulties. The website will close down on 28 August, with account holders still able to cash in both balances and active bonuses after this date.

Casino Choice journalist

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