EU operators lodge formal complaint on German law

Industry trade body the European Gaming and Betting Association (EGBA) has lodged a formal complaint with the European Commission against the recently passed German gambling law.

The Interior Ministry in Hesse recently invited expressions of interest in up to 20 sports betting licences to be issued under the new Interstate Treaty on Gambling (ITG), which came into force on 1 July after being ratified by 14 of Germany’s 16 federal states. In addition to an accompanying 5% turnover tax on all sports bets taken in Germany, the ITG extended the pre-existing ban on online poker and casino.

EGBA secretary general Sigrid Ligné urged the European Commission (EC) to handle the complaint urgently, as the ongoing tender process in Germany for the allocation of licences under the new regime appeared “not to be designed to pursue the declared purpose of conducting an open, fair and transparent Europe-wide call for bids.” The main basis of the complaint, submitted “together with other industry partners”, is the new regime’s incompatibility with the freedom to trade and establishment rights enshrined within Articles 49 and 56 of the EU Treaty.

The trade association’s members include Betclic, Bet-At-Home, bwin.party, Digibet, Expekt, Interwetten and Unibet.

bwin.party, Sportingbet and Betfair are among the pan-European online operators known to have applied for federal sports betting licences in Germany, despite the latter’s CFO Stephen Morana admitting “our current exchange model would not be viable” with the accompanying 5% turnover tax.

In March, the EC gave German authorities also have two years to prove that the ITG’s restrictions on freedom to provide gambling services within the European Economic Area justified its aims of better protection for players from crime, fraud and addiction, “in particular in view of the current development of the on-line poker market in Germany”.

The EC also expressed doubts whether taxing sports bets at 5% of turnover would be economically viable, and also over the lack of data provided by the 15 participating Lander to back up their claim that the ban on online casino and poker was justifiable because these games were more vulnerable to rigging, money laundering and increased addiction risks.

The one German federal state not to ratify the ITG, Schleswig-Holstein, notified the EC earlier this month of amendments to its Gambling Law to enable it to rejoin the ITG. This followed the return to power in July of a coalition led by the SPD Party, which opposed the law passed by the previous FDP-CDU grouping. SH has so far issued 12 online sports betting licences, and has said it is legally bound to keep the licensing process active until the EC has approved its gambling reforms. The EC’s standstill period is scheduled to end on 7 December 2012.

Article written by Stephen Carter


Casino Choice journalist

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