EGR: Online gambling ban in Germany could be overturned

GERMANY'S ONLINE GAMBLING ban is under threat after one of the 16 German states that ratified the treaty underpinning the ban demanded its cancellation at the weekend.

The agreement between the ruling coalition Christian-Democratic Party (CDU) and the Liberal Party (FDP) in Schleswig-Holstein, the northernmost of Germany’s 16 Lander, was published on Saturday and called for an end to the German Interstate Treaty on Gambling and its replacement with new regulation.

The leader of the FDP and the coalition in Schleswig-Holstein, Jürgen Koppelin, said that if the other German states failed to agree on a new uniform regulation to replace the Treaty, which came into force on 1 January last year, the coalition would seek to introduce an intrastate licensing system.

German gaming lawyer Martin Arendts of Arendts Anwalte said that “the argument that only a monopoly can protect customers, prevent problem gambling and guard against fraud would not hold any more,” which would undermine the monopoly position of the other German states.

Although the coalition is only reported to have commented on the potential impacts of such a move on the land-based gaming industry in the state, such as privatising state-owned casinos, Arendts told EGRMagazine.com that any new licensing system would necessarily have to apply to online gaming and betting, all forms of which except horse race betting are currently banned.

The European Gaming and Betting Association has consistently argued that the protectionist monopoly position of Germany’s Interstate Treaty on Gambling contravenes European Union law under Article 49 of the Treaty of Rome by restricting the rights of its members, such as Bwin and Unibet, to provide online gaming services.

Arendts also highlighted that Schleswig-Holstein only ratified the Interstate Treaty on Gambling in December 2007 for “fiscal reasons,” having previously favoured a separate Interstate Treaty on Sport Betting that would have provided licenses for private bookmakers.

A failure by all the German states to ratify a new regulation by 1 January 2012, when the existing treaty expires, would also render the current state gambling monopoly unenforceable.

Stephen Carter
eGaming Review

Coalition agreement in Schleswig-Holstein demands cancellation of the German Interstate Treaty on Gambling

by Martin Arendts, attorney-at-law

Kiel/Germany – According to the coalition agreement between the Christian-Democratic Party (CDU) and the Liberal Party (FDP), published on 17 October 2009, Schleswig-Holstein, one of the 16 German states (Länder), will cancel the Interstate Treaty on Gambling (Glücksspielstaatsvertrag) and thereby end the state monopoly on gambling.

According to Jürgen Koppelin, leader of the Liberal Party Schleswig-Holstein, other German states might follow the example of Schleswig-Holstein. If the Germans states can not agree on a new uniform regulation, CDU and FDF announced to consider a licensing system. According to the coalition agreement, the now state-owned casinos in Schleswig-Holstein will also be privatised.

Originally, Schleswig-Holstein did not agree to the Interstate Treaty, but favoured an alternative model, a separate Interstate Treaty on Sport Betting, providing licenses to private bookmakers. Due to “fiscal reasons” the state finally ratified the Interstate treaty on Gambling in 2007.