28 September 2009

Administrative Court of Mainz assesses constitutional deficits of sports betting monopoly

by Martin Arendts, Attorney-at-Law

The Administrative Court of Mainz, Germany, noted yet again constitutional deficits of the state’s sports betting monopoly. In the case at hand, the judges therefore granted exemption from judicial execution to the defendant (order of 4 September 2009, file number: 6 L 770/09.MZ).

Thus the defendent, represented by ARENDTS ANWÄLTE, may continue to collect and forward offers of sports bets to a bookmaker, licensed in the EU member state Austria. This may happen under the usual requirements, i.e. to point out possible addictiveness and to prohibit the participation of minors. Hence the plaintiff, the State Rhineland Palatinate, was unsuccessful in its attempt to amend an interim order in favour of the betting shop, issued in 2007.

The Court pointed out that the monopoly organiser of sports betting, Lotto Rheinland-Pfalz GmbH, does not meet the requirements as formulated in § 10 Abs. 3 GlüStV (Interstate Treaty on Gambling), or the criteria outlined by the Federal Constitutional Court in its decision from March 28th 2006. The aforementioned statute and court decision, both highlighted that it was necessary to reduce the number of receiving offices effectively, in order to comply with § 1 GlüStV. The state’s legislation, however, only specified an effective reduction of receiving offices till 2011. The Court therefore made it clear that this would not suffice. Furthermore it disapproved of the exact wording of the satute in question, as it only provided for a vague guideline.

16 September 2009

right2bet petition

The right2bet petition:

I hereby state my support for right2bet and their aim for all EU citizens to have the right to choose which EU licensed online betting provider they use, irrespective of which Member State they operate from.

I, the undersigned, wish to bring to your attention the following:

- I want the right to use the Internet to bet online across borders of all EU Member States.

- I want the right to use websites of EU licensed online gambling operators that give me more fun, better odds and better games.

- I do not want to have to go outside the EU to use sites which may be unlicensed and whose origins I know nothing about.

- I want you to take firm action against governments of EU Member States that will still not allow me (and other citizens of the EU) to exercise this freedom.

- I want to know that responsible gambling will be encouraged. I want to know that my children cannot access these sites.

- I want the Commission to take action against Member States that do not allow me to bet with EU-licensed operators that meet the highest standards in consumer and child protection, socially responsible gambling and crime prevention.

- I want you to take action to remove the existing barriers to EU consumers exercising their rights to purchase online services across EU Member States borders.


13 September 2009

Deutscher Lotto- und Totoblock: European Court of Justice strengthens German gambling regulation

• Last remaining doubts over German Interstate Gambling Treaty cleared up
• Foreign sports betting to remain illegal in Germany
• Gambling monopoly in Portugal is legitimate

Erwin Horak, President of the Bavarian State Lottery Administration and Chairman of the Legal Committee of the German Lotto- und Totoblock, said he was satisfied with the ruling by the European Court of Justice (ECJ) on gambling which was announced today. The ruling strengthens the nation states of the European Union. The judges decided that freedom to provide services may indeed be restricted in the case of gambling. The EU states may ban online gambling services because different and more severe risks of fraud apply to online gambling.

The object of the case (C-42/07) brought before the ECJ was the legal regulation of sports betting in Portugal. The specific matter at hand was the legitimacy of a law which grants the sole right to offer lottery and sports betting services in Portugal to a non-profit organisation. According to the ECJ ruling, the member states may decide for themselves how to regulate this industry. The gambling authorisation granted in one member state does not have to be recognised by the other member states. As such, foreign sports betting will remain illegal in Germany.

The European judges had already stressed repeatedly in recent years that restrictions in the gambling industry may be legitimate for overriding reasons in the public interest such as the protection of consumers. The German Federal Constitutional Court had also thoroughly examined and confirmed the legitimacy of the Interstate Gambling Treaty on 14 October 2008 and 20 March 2009.

“There are no longer any remaining doubts at all over the legitimacy of the German Interstate Gambling Treaty in terms of European law. I am very optimistic about the German cases which are still awaiting resolution,” said Erwin Horak. “Today’s decision is another signal to the federal states that they are on the right track. The ruling is also a heavy blow for the commercial gambling industry. As of today, there is no longer any hope for an unregulated gambling market which has no borders and is oriented solely towards the profits of illegal providers,” added Horak.

press release of Deutscher Lotto- und Totoblock

08 September 2009

bwin / Santa Casa: ECJ delivers judgment in the bwin/Portuguese football league versus Santa Casa case

Today, the European Court of Justice (ECJ) rendered its judgment in a case involving bwin and the Portuguese football league versus the Portuguese monopolist Santa Casa da Misericórdia de Lisboa (Santa Casa). Santa Casa claimed that bwin´s sponsorship agreement with the Portuguese professional football league and accompanying advertising activities were illegal because of Santa Casa’s monopoly in providing on and offline lottery and betting services in Portugal.

According to the ECJ, the Portuguese monopoly on the Internet may comply with Community law under certain conditions, but restrictions imposed by a Member State “must be suitable for achieving the objective or objectives invoked by the Member State concerned, and they must not go beyond what is necessary in order to achieve those objectives. Lastly, in any event, those restrictions must be applied without discrimination.”

Sigrid Ligné, Secretary General of the EGBA: “Given the stringent anti-fraud regulations applicable to EU licensed operators which ensure a high level of integrity, transparency and traceability over online gaming transactions, we do not believe those conditions are met. Several jurisdictions in the EU already prove that it is possible to guarantee a high level of consumer protection and have a well regulated and competitive online gaming market at the same time.”

Today’s judgment must also be seen in the context of the increasing number of Member States that are now in the process of rethinking and redrafting their gaming legislation. As has been obvious for all other consumer markets before, none of the Member States currently drafting legislation has chosen a monopoly model to regulate this modern Internet based market.

press release of EGBA

Online gaming: ECJ rules in bwin v Santa Casa

The European Court of Justice (ECJ) today published its judgment in the preliminary ruling proceedings bwin and Liga Portuguesa de Futebol Profissional v the Portuguese monopoly Santa Casa da Misericórdia de Lisboa. In these proceedings, the ECJ assessed whether the Portuguese sports betting and lottery monopoly and its extension to include the internet is compliant with EU law.

In particular, the ECJ examined “whether the freedom to provide services precludes the Portuguese legislation in so far as the latter prohibits operators such as bwin, established in other Member States where they lawfully provide similar services, from offering games of chance via the internet in Portugal.” In its decision, the Court finds “that the Portuguese legislation constitutes a restriction on the freedom to provide services.”

The Court also maintains “that restrictions on the freedom to provide services may be justified by overriding reasons relating to the public interest. However, the Court notes that the restrictive measures that Member States may impose must satisfy certain conditions: they must be suitable for achieving the objective or objectives invoked by the Member State concerned, and they must not go beyond what is necessary in order to achieve those objectives. Lastly, in any event, those restrictions must be applied without discrimination.”

The ECJ concludes that prohibiting private online gaming providers from offering games of chance via the internet is compatible with Community law. However, the Court overlooks the fact that respectable private online gaming providers such as bwin are just as able to control gaming in the internet as state monopolies.

Internet warrants greater security than brick-and-mortar gaming
Using this IT-based medium, highest security standards can be met to warrant customer protection and fraud control in particular. As founding member of the European Gaming and Betting Association, bwin helped develop the compulsory Code of Conduct for private online gaming providers. This Code stipulates strict controls which, given the transparency of the internet, have proven more efficient in the internet than in traditional brick-and-mortar gaming and, in particular, conclusively prevent any type of fraud. The European Sports Association, whose efforts also serve to prevent betting manipulation, has successfully been able to implement this.

Internet Gaming is Market Reality – It’s time for legislators to act
Today’s decision once again underscores that a modern regulation of online gaming is indispensable in order to protect consumers. Co-CEO Norbert Teufelberger comments on this ECJ decision: ”Internet legislation contains technical requirements and the Commission must be notified of these before they come into force. This was not done in the present case. As the national court did not consider the notification issue, the ECJ refrained from addressing the matter. It will therefore have to be resolved in the national proceedings. In so doing, the national court will surely go by the statements of Advocate General Bot who pointed out that no penalties could be imposed as no notification had been made.” And he added: ”A legal vacuum has emerged in the European gaming sector because of the rapid pace of technological progress. Among other things, this is borne out by over a dozen preliminary ruling proceedings still pending before the ECJ as well as numerous infringement proceedings against EU Member States which the European Commission has so far put on hold. As a transparent company listed at the stock exchange, it has therefore always been our ambition to change this situation as quickly as possible and to offer our line-up in a regulated environment governed by legal security.”

Co-CEO Manfred Bodner continues: “Online gaming has become a market reality. There is urgent need to develop a legal framework in tune with the times to warrant the interest of consumers, the state and operators. Court rulings will not be able to fill in for a regulation in the medium and long run.”

Norbert Teufelberger specifies: “Only a regulated online gaming market with a diversified and attractive line-up of games will provide adequate security against the risks of a black market which in fact not only opens up the floodgates to crime but also passes up on consumer protection. This is why a growing number of Member States, including Great Britain, Italy or France, have reacted. We are confident that Portugal will also set the course for an attractive regulated online gaming market.”

Background information on the ECJ proceedings bwin and Liga Portuguesa de Futebol Profissional (LPFP) v the Portuguese monopoly Santa Casa da Misericórdia de Lisboa (SCML):
In August 2005, bwin signed a sponsoring agreement with LPFP for a period of four playing seasons. In view of Portuguese law, which grant SCML sole authority to negotiate sports bets, SCML filed a number of lawsuits, including infringement proceedings, against bwin and LPFP. An administrative penalty was imposed on bwin and LPFP and they lodged an appeal. The court entrusted with the case in Portugal referred a list of questions on the interpretation of the Portuguese gaming monopoly under EU law to the ECJ.

What are preliminary ruling proceedings?
The Court of Justice works together with all courts in the Member States. They are responsible for the application of Community law. To ensure the effective and consistent application of Community law and to prevent diverging interpretations, national courts can (and in some cases must) address the Court of Justice and request it to interpret Community law in order to verify compatibility of their national legislation with Community law. A preliminary ruling may also requested for verification of the validity of a Community act.

See http://curia.europa.eu

further inquiries

Press Officer
Kevin O'Neal
Telephone: +43 (0)50 858-240 10
Fax: +43 (0)50 858-16
E-mail: press@bwin.org

Investor Relations
Konrad Sveceny - Head of Investor Relations
Telephone: +43 (0)50 858-200 17
Fax: +43 (0)50 858-16
E-mail: investorrelations