German states split over monopoly future
German Länder struggle to agree a consensus over allowing private operators into the country's sports betting and egaming market.
Germany’s federal states are split over whether to allow private operators into the country’s online sports betting market, it emerged yesterday after a meeting of the 16 Länder ministers responsible for gaming policy.
Wolfgang Boehmer, the state premier of Saxony-Anhalt, told Reuters that they had agreed to maintain the state monopoly on lotteries but still needed to agree future regulation for sports betting.
Germany’s 16 federal states are currently split into three positions over whether or not to open up Germany’s lucrative sports betting and egaming market to private operators.
The northern state of Schleswig-Holstein plans to issue online sports betting, casino and poker licences to private operators from 2011 with a view to operators being up and running by 1 January 2012 when the current State Gambling Treaty banning the offer of games of chance over the internet in the country lapses.
Wolfgang Kubicki, FDP parliamentary group leader in Schleswig-Holstein, stated ahead of yesterday’s meeting that they would forge ahead with these plans even if a collective decision was made by the Länder to uphold the monopoly. Its parliament will meet today to continue discussing the draft to establish a licensing framework based on “the Danish model” with 20% gross profits tax.
A group of around five Christian Democrat Party-led states are in favour of opening the country’s sports betting market to private operators, while another of Social Democrat-governed Länder, including Rhineland-Palatinate and North Rhine-Westphalia, want to uphold the existing state monopoly on lottery and sports betting.
German gaming law authority Wulf Hambach, of lawyers Hambach & Hambach, told eGaming Review that this split between the Länder means Germany’s egaming market is likely to regulate on a state-by-state basis, resulting in “a domino effect”.
But in the meantime, monopoly and private operators are operating in a “chaotic situation”, says Hambach, following a number of court rulings by the European Court of Justice (ECJ) and German judges which have questioned the legal basis of the country’s gaming monopoly based in its State Gambling Treaty.
“Now the private operators are relating to the ECJ decision of 8 September, that of the federal civil court, the federal administrative court, but nobody has clear guidelines, so it’s now time for the politicians to move,” Hambach told eGaming Review, explaining the reasons behind yesterday’s meeting of Länder ministers.
September’s landmark ECJ ruling in the Carmen Media case and others questioning the legality of the application of Germany’s monopoly under EU law was followed in November by Germany’s highest civil court ruling that lottery provider Westlotto could not be granted injunctions against Bwin.
Then later that same month, Germany’s highest administrative court in Bavaria ruled that the monopoly could only be compliant with European Law when all gambling sectors of the state took equal action towards preventing gaming addiction as manifested in the German State Gambling Treaty.
The failure of the German model to “dry out a market that is licensed and regulated in other Member States,” in Hambach’s words, is further reinforced by Gold Media-provided data showing that 7.3bn of the 7.8bn staked in Germany in 2009 was unregulated remote gambling, representing 94% of the total.
For more analysis of the current situation in Germany, see the forthcoming issue of eGaming Review.