German Gaming Law

Online gaming and betting: proposed new law in Germany criticised by the European Commission

2011-07-19T10:27:00.000+01:00

Brussels, 19 July 2011

The European Commission today issued a ‘detailed opinion’ against the draft German State Gambling Treaty. This detailed opinion confirms that the Commission believes the proposed German State Treaty is in breach of EU law. If the draft is not substantially changed after this warning, Germany risks formal infringement proceedings, referral to the European Court of Justice (CJEU) and ultimately financial penalties.

The Commission has identified a number of provisions in the German draft State Gambling Treaty which are in conflict with the EU Treaty. While the draft law appears to open the market for online sports betting operators from all EU member states, it in practice reserves the market for the incumbent German monopolies. EGBA considers that several requirements in the draft State Treaty are in breach of EU law, including:

• The total number of sports betting licences available is limited without justification to seven (7), whereas the state monopoly for sports betting is exempt from the requirement to apply for a licence;
• An exorbitant tax of 16.67 percent of the amount wagered is imposed on all operators. This will make online wagering uneconomic, excluding online operators and is clearly intended to protect the current state monopoly on offline bets from online competition;
• The licensing system ‘bundles’ offline and online sports betting together and applies a commercial viability test to would-be operators, thus putting online-only operators at an automatic disadvantage in applying for a licence;
• While privately owned land-based premises are limited to 350 per license, no such restriction applies to outlets employed by the state-owned operators
• Certain casino games may be offered online but only by specified casino game operators that are already operating land-based casino games in Germany;
• An illegal expansion of marketing is encouraged for the state monopoly, but marketing restrictions are placed on other operators;
• The license fee will favour those applicants with land-based operations that attract higher margins and appears to be unrelated to the costs incurred to deliver and then maintain the license.

Sigrid Ligné, Secretary General of EGBA said today: ‘The draft German treaty has many provisions which are in conflict with EU law. But worse: it is clear that, taken together and especially including a prohibitive tax on wagers from which the incumbent state monopoly is exempt, these provisions effectively slam the door in the face of EU operators from other member states and will in fact extend the monopoly for offline to online games. The Commission must act quickly to stop this test case for its stated aim of a common EU framework for this sector ’.

The proposed German State Gambling Treaty comes after a number of preliminary rulings by the EU Court that the current State Treaty is incompatible with EU law (see inter alia Carmen Media, C- 46/08). The current law expires at the end of 2011 and the intention was to have the new treaty to come into force in January 2012.

In Germany the regions, or Länder, are competent for lotteries and sports betting while casinos and slot machines are the competence of the federal state. There is however no agreement between the Länder on this draft treaty on sports betting. Schleswig Holstein has already notified an alternative gambling law that will foster a commercially viable sports betting market for EU-licensed operators, thereby removing the attractions of the black market for consumers. The Commission raised no objections to such law and EGBA remains fully supportive of the efforts to enact it.

According to a study by Gold Media, the gross online gaming and betting revenue in Germany was €1 billion in 2009, with a 30 percent annual growth rate (1). Online gaming is a large and vibrant segment of the digital economy in Germany. Whilst material, failing to comply with EU law is only one of the major issues with the proposed State Gambling Treaty. The draft Treaty, if enacted as proposed will simply drive consumers into the hands of black market operators that will not deliver the same levels of consumer protection, that will reduce visibility of the online gaming and betting market in Germany and will forego the opportunity to raise tax revenue.

(1) http://www.goldmedia.com/en/press/newsroom/
study-betting-and-gambling-in-germany.html

For further information or comment please contact:
Sigrid Ligné: +32 2 554 08 90
Sigrid.Ligne@egba.eu

About EGBA
The EGBA is an association of leading European gaming and betting operators Bet-at-home.com, BetClic, bwinparty, Digibet, Expekt, Interwetten, and Unibet. EGBA is a Brussels-based non-profit association. It promotes the right of private gaming and betting operators that are regulated and licensed in one Member State to a fair market access throughout the European Union. Online gaming and betting is a fast growing market, but will remain for the next decades a limited part of the overall European gaming market in which the traditional land based offer is expected to grow from € 79.6 Billion GGR in 2009 to € 83 Billion GGR in 2012, thus keeping the lion’s share with 87% of the market. Source: H2 Gambling Capital, April 2010

The Notification Procedure

Under Directive 98/34/EC, Member States must notify to the European Commission and other Member States draft regulations regarding products and Information Society services such as online gaming and betting, before adopting them. This procedure is aimed at preventing Member States from creating new barriers to the internal market freedoms by giving the opportunity to the Commission and Member States to evaluate the content of a draft law before it is adopted.

The notification of a text to the Commission opens a three month standstill period during which the draft text must not be adopted. This period allows the Commission and Member States to ascertain whether the draft text presents any unjustified barriers to the internal market. The Commission and/or Member States may then issue:
• a detailed opinion, if they consider that the draft text would, if implemented, create barriers to trade, services or establishment within the EU;
• comments, if they consider that the text raises issues of interpretation or requires further details; or
• no response, if they consider that the text is compatible with EU law.
A detailed opinion attempts to prevent Members States from adopting a text, which contains barriers to the internal market, or to urge them to remove the restrictive provisions, thereby avoiding unnecessary legislative work and future EU infringement proceedings.

Once a detailed opinion had been issued, the standstill period, during which the draft text must not be adopted, is extended by one month. If, after this time, the draft text is adopted without modification, the Commission can immediately commence an infringement procedure against the Member State’s newly adopted legislation.

To access the TRIS database and search for other draft laws see:
http://ec.europa.eu/enterprise/tris/pisa/app/search/index.cfm?lang=EN

Sportwettenrecht120 final

2011-03-19T03:02:00.001Z

Check out this SlideShare Presentation:

Sportwettenrecht120 final

View more documents from Martin Arendts.

A View of European Gambling Regulation

2011-03-19T03:00:00.001Z

Check out this SlideShare Presentation:

A view of european gambling regulation

View more documents from Martin Arendts.

Principality of Liechtenstein: Call for Tenders for a Casino License

2011-02-01T16:23:00.002Z

by Attorney-at-Law Martin Arendts, M.B.L.-HSG

The new Gambling Act (Geldspielgesetz - GSG) and the Casino Ordinance (Spielbankenverordnung - SPBV) of the Principality of Liechtenstein allow the operation of a casino. Today, the government authorised the call for tenders. Until an evaluation report will be published, only one license will be granted. Applications for the license have to be filed by 31 March 2011, 4:30 p.m.

European Parliament: Online gambling - a roll of the unregulated dice?

2010-02-19T23:13:00.003Z

A number of MEPs urged Internal Market Commissioner Michel Barnier to come up with common rules to regulate cross border online gambling in Europe. In a debate on 11 February many MEPs were concerned about the effects of gambling on minors, addiction and money laundering.

With gambling being a €70 billion industry in Europe online firms are hoping to break into this national market. This has brought tension and the European Court of Justice has upheld the right of nations to regulate online gambling.

The tension between the EU's internal market and the right of national regulators to monitor the trade lies at the heart of the legal confusion over online gambling. At present no rules on online gambling exist. Several countries have tried to ban cross-border online betting and the European Commission launched proceedings against them for flouting internal market rules. However, the court's decision to uphold a case where Portugal banned a company based in Gibraltar has shaken things up.

Join our debate online on Facebook on the issues raised in this article.

"Can and must be regulated"

Speaking in the debate Michel Barnier promised a "new approach" with a Green paper on possible policy options by the end of the year.

Thursday's debate was in response to an Oral Question tabled by five MEPs led by the Chair if the Internal Market Committee Malcolm Harbour. Speaking in the debate, the British Conservative said, "it is absolutely the right time for the Commission to be coming out with a clear strategy". He went on to say that online gambling "can be regulated and must be regulated".

However, Mr Harbour stressed the importance of giving people the right to choose: "We must also respect our citizens and the fact that many of them want to access online gambling" so "it can't be right to ban online gambling with a company from outside your own country".

States should not be forced to open markets

Andreas Schwab of the European People's Party called for "uniform cross-border solutions at the European level". The woman who steered the services directive through Parliament in 2006, German Socialist Evelyne Gebhardt called on the Commission to stop "quite improper" infringement procedures. She said "member states should not be forced to open market up if their controls are strong and effective and we want the Commission to finally understand this".

For the Greens, Heide Ruhle said that European rules should respect "European specificities".

"These are not services just like any other"

In terms of the possible legal and social dangers of gambling Dutch MEP Dennis De Jong of the leftist GUE/NGL told the House "we should limit online gambling as much as possible and we should ask the Commission not to lower the level of protection".

Speaking at the end of the debate, Mr Barnier said, "make no mistake; I have come to talk about a new approach". He went on to say "these are not services just like any other. Fighting cross-border crime without a European approach is impossible. We have to have strict limits so that minors can't play and on this we need EU coordination".

Have your say in our Facebook debate.

press release of the European Parliament

Online Gaming and Betting: Barnier to take the lead

2010-02-12T10:35:00.002Z

Brussels, 11 February 2010

EGBA welcomes the commitment made by the newly appointed Internal Market Commissioner Michel Barnier to address the situation of gaming and betting at EU level.

Addressing members of the European Parliament today, Commissioner Barnier confirmed that the analysis of the Commission Legal Service regarding the most recent European Court of Justice ruling (Santa Casa, C-42/09) does not change fundamentally the Commission’s approach towards infringement procedures. The Commissioner said that the Santa Casa ruling of 8 September 2009 was based on considerations specific to Portugal and to its national monopoly operator. The Commission will therefore continue to examine the compliance of national legislation with EU law on a case-by-case basis.

Sigrid Ligné, Secretary General of the EGBA, comments “With several Member States currently reforming their gaming and betting legislation, this is an important confirmation that the Commission will not stand by while Member States introduce restrictions that go against fundamental principles of the EU”.

She adds “We believe that the respect of Internal Market rules in our sector will promote high standards and improve the protection of players throughout the EU”.

EGBA also strongly supports the Commissioner’s intention to engage in a broad consultation with stakeholders and to work on a political document, based on reliable figures and a clear diagnosis of the situation in Europe. The Commissioner raised the prospect of a Green Paper on gambling, a move which EGBA believes could offer a real opportunity to test the interest and support of the European Parliament and Member States for future EU harmonization in the sector.

For further information or comment please contact:

Sigrid Ligné: +32 (0) 2 2567527
sigrid.ligne@egba.eu

ECJ: No exception to the primacy of EU law over national gaming legislation says Advocate General Bot

2010-01-27T11:46:00.002Z

Brussels, 26 January 2010

The European Gaming and Betting Association (EGBA) welcomes today’s opinion of Advocate General (AG) Bot in the betting case involving Winner Wetten (C-409/06) before the Court of Justice of the EU (CJEU). The opinion confirms that the primacy of EU law over national gaming legislation does not allow for any exception or transitional period. AG Bot dismissed the argument of Germany and other Member States that they should be allowed to have such an exception. Member States therefore have to immediately stop applying national gaming legislation that is not consistent with EU law.

This case involves Winner Wetten, a company located in Germany, accepting bets on behalf of an online betting service provider based and licensed in Malta. The Court in Cologne asked whether governments are allowed to continue to apply for a transitional period gaming legislation that is not compatible with the freedom of establishment and freedom to provide services provisions in the EU Treaty. The Cologne court considered North Rhine-Westphalia´s law on sports betting in force in 2006 to be inconsistent with the freedom to provide services as interpreted in the Gambelli ruling.

AG Bot clarified that there are no legal arguments to allow for an exception to the direct application of the Treaty to the gaming and betting sector. In addition, AG Bot confirms that it is not in the interest of consumers to maintain non EU compliant legislation that does not offer consistent and systematic protection. According to AG Bot, such ´legislation is itself inappropriate for the protection of consumers´ (para 113).

Secretary General Sigrid Ligné comments: ´This opinion is crucial for developments in Germany. The AG has made clear that EU law prevails and that unjustified restrictions are not admissible even for a transitional period. Today’s opinion will further fuel the current political debate on online gaming in Germany´.

Sigrid Ligné further adds: ´We agree with the conclusions of AG Bot. Essential is AG Bot´s confirmation that it is detrimental to consumers to have national gambling legislation that doesn’t offer consistent and systematic protection. Many Member States do not have consistent and systematic gambling legislation; this opinion clearly strengthens our argument.´

A date for the ruling of the CJEU has not yet been set.

ECJ and Gambling: New referral from Austria

2009-11-09T01:20:00.000Z

Reference for a preliminary ruling from the Bezirksgericht Linz (Austria) lodged on 31 August 2009 -
Criminal proceedings against Jochen Dickinger, Franz Ömer

Case C-347/09

Questions referred:

1. (a) Are Articles 43 EC and 49 EC to be interpreted as, in principle, precluding legislation of a Member State, such as Paragraph 3 in conjunction with Paragraph 14 et seq. and Paragraph 21 of the Austrian Law on Gaming (Glücksspielgesetz), under which

- a licence for lotteries (e.g. lotteries, electronic lotteries, etc.) may be granted to no more than one applicant for a period of up to 15 years, such applicant being required, inter alia, to be a capital company established in Austria, prohibited from establishing branches outside Austria, having a paid-up nominal or share capital of at least EUR 109 000 000 and which may, in the circumstances, be expected to achieve the best yield in terms of federal taxation;

- a licence for casinos may be granted to no more than 12 applicants for a period of up to 15 years, such applicants being required, inter alia, to be public limited companies established in Austria, prohibited from establishing branches outside Austria, having a paid-up share capital of EUR 22 000 000 and which may, in the circumstances, be expected to achieve the best yield in terms of taxation for the regional authorities?

These questions arise specifically against the following background: Casinos Austria AG holds all 12 casino licences, which were granted on 18 December 1991 for the maximum period of 15 years and which have since been extended without a public tendering procedure or notice.

(b) If so, can such legislation also be justified for reasons relating to the public interest in a restriction of betting activities if the licensees in a quasi-monopoly are themselves pursuing a policy of expansion of games of chance, and employing intensive advertising in order to do so?

(c) If so, must the referring court - in its examination of the proportionality of such legislation, which aims to prevent criminal offences by monitoring operators active in this sector and thereby steering gaming activities towards a regime in which they will be subject to checks - take account of the fact that the legislation also covers cross-border service providers who, in any event, are subject in the Member State of establishment to the strict conditions and checks associated with their licence?

2. Are the fundamental freedoms of the EC Treaty, in particular the freedom to provide services under Article 49 EC, to be interpreted as meaning that, irrespective of the continuing responsibility, in principle, of the Member States for the regulation of criminal law, rules of a Member State's criminal law are nevertheless to be assessed by reference to Community law if they are liable to prohibit or impede the exercise of one of the fundamental freedoms?

3. (a) Is Article 49 EC, in conjunction with Article 10 EC, to be interpreted as meaning that the checks carried out in a service provider's State of establishment, and the safeguards provided there, must be taken into account in the State in which those services are provided, on the basis of the principle of mutual trust?

(b) If so, is Article 49 EC to be interpreted further as meaning that, where the freedom to provide services is restricted for reasons in the public interest, consideration must be given to whether sufficient account is not already taken of this public interest in the legal provisions, checks and investigations to which a service provider is subject in the State in which he resides?

(c) If so, must consideration be given - when examining the proportionality of a Member State's rules imposing penalties for the cross-border provision of gaming services without a licence granted in that Member State - to the fact that the regulatory interests upon which the State in which the services are provided relies in order to justify the restriction of the fundamental freedom are already sufficiently taken into account in the State of establishment in strict authorisation and supervision procedures?

(d) If so, must the referring court take account - in the context of its examination of the proportionality of such a restriction - of the fact that, in the State in which the service provider resides, the degree of control exercised by virtue of the provisions in question actually exceeds that of the State in which the services are provided?

(e) Moreover, does the principle of proportionality in the case of a prohibition - on pain of criminal penalties - of games of chance that is imposed for regulatory reasons, such as the protection of players and the fight against crime, require the referring court to make a distinction between providers who offer games of chance without any authorisation whatsoever, and those who are established and licensed in other Member States of the European Union and who conduct their activities in the exercise of their freedom to provide services?

(f) In the examination of the proportionality of a Member State's rules prohibiting the cross-border provision of gaming services without a licence granted or authorisation given in that Member State, on pain of criminal penalties, must account be taken, lastly, of the fact that, as a result of objective, indirectly discriminatory barriers to entry, it has not been possible for a provider of games of chance who is duly licensed in another Member State to obtain a licence in the first Member State, and the licensing and supervisory procedure in the State of establishment offers a level of protection that is at least comparable to that of the first Member State?

4. (a) Is Article 49 EC to be interpreted in such a way that the temporary nature of the service provision precludes the service provider from equipping himself with a certain infrastructure (such as a server) in the host Member State without being deemed to be established in that Member State?

(b) Is Article 49 EC to be interpreted further as meaning that a provision directed at support services within a Member State which prohibits them from facilitating the provision of services by a provider established in another Member State also amounts to a restriction of that service provider's freedom to provide services if the support services are established in the same Member State as some of the recipients of the service?

EGR: Online gambling ban in Germany could be overturned

2009-10-25T00:38:00.001Z

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

2009-10-17T14:52:00.002Z

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.

Administrative Court of Mainz assesses constitutional deficits of sports betting monopoly

2009-09-28T21:35:00.001Z

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.

right2bet petition

2009-09-16T20:30:00.001Z

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.

http://www.right2bet.net

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

2009-09-13T21:35:00.003Z

• 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

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

2009-09-08T14:03:00.002Z

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

2009-09-08T11:44:00.003Z

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

Gambling: EJC to decide on disparate taxation of different forms of gambling

2009-05-06T11:19:00.002Z

Reference for a preliminary ruling from the Bundesfinanzhof (Germany), lodged on 11 February 2009 - Leo-Libera GmbH v Finanzamt Buchholz in der Nordheide

(Case C-58/09)

Referring court

Bundesfinanzhof

Parties to the main proceedings

Claimant: Leo-Libera GmbH

Defendant: Finanzamt Buchholz in der Nordheide

Question referred

Is Article 135(1)(i) of Council Directive 2006/112/EC 1) of 28 November 2006 on the common system of value added tax to be interpreted as meaning that Member States are permitted to have a rule under which only specified forms of (race) betting and lotteries are exempt from tax, and all 'other forms of gambling' are excluded from the tax exemption?

____________

1 - OJ 2006 L 347, p. 1.

Federal Constitutional Court: Number-of-units taxation standard of the Hamburg Gaming Machines Tax Act incompatible with the principle of equality

2009-04-30T12:30:00.004Z

Order of 4 February 2009 – 1 BvL 8/05 –

The judicial referral concerns the constitutional admissibility of the number of units as the standard for the taxation of coin slot machines pursuant to § 4.1 of the Hamburg Gaming Machines Tax Act (Hamburgisches Spielgerätesteuergesetz - SpStG), which was valid until 1 October 2005. Under this provision in its version relevant to the original proceedings, the tax rate is DM 600 per gaming machine and calendar month. Neither the amount brought in by the gaming machines nor the stakes made by the gamblers is taken into account when assessing the tax.

From January 1999 to February 2000, the complainant and plaintiff in the original proceedings operated two amusement arcades in which at first 18, later 16 coin slot machines were located. The plaintiff submitted respective gaming machine tax statements while at the same time lodging objections; the objections were denied by the Tax Office, the defendant in the original proceedings. The complainant brought action against this before the Hamburg Finance Court (Finanzgericht Hamburg). By its order of 26 April 2005, the Hamburg Finance Court stayed the proceedings and submitted to the Federal Constitutional Court the question as to whether § 4.1 of the Hamburg Gaming Machine Tax Act violates the general principle of equality.

The First Senate of the Federal Constitutional Court reached the conclusion that § 4.1 SpStG is incompatible with Article 3.1 of the Basic Law (Grundgesetz - GG), but not void. Taking the number of units as a standard of taxation results in an unequal burden on the gaming machine operators because it is structurally unsuitable to guarantee the necessary connection to the gamblers' amusement expenses. While the previous case-law of the Federal Constitutional Court and of the Federal Administrative Court (Bundesverwaltungsgericht) still regarded the number-of-units standard as a constitutionally valid and unobjectionable basis for the levying of the tax, this can no longer be justified according to the state-of-the art technical standards, as the Federal Administrative Court and the Federal Finance Court (Bundesfinanzhof) have meanwhile found. The Gaming Machine Tax Act can, however, continue to be applied for the assessment periods until 1 October 2005.

In essence, the decision is based on the following considerations:

The legislative competence of the Free and Hanseatic City of Hamburg for issuing the Gaming Machine Tax Act results from Article 105.2a GG. As a local tax on expenses, the Hamburg Gaming Machine Tax Act meets the requirements of this provision on competence; the choice of the taxation standard and the question of whether the tax may be shifted to the gamblers have no influence on the legislative competence.

The provision submitted, however, violates the general principle of equality (Article 3.1 GG) because taking the number of units as a standard has proven unsuited for levying the gaming machine tax, thereby placing an unequal burden on the gaming machine operators in an unjustifiable manner. It is, however, not the lack of the possibility of shifting the tax to the gamblers which makes the tax fail.

The point of reference of the entertainment tax in the shape of the gaming machine tax is the commercial organisation of gaming with slot machines. The organiser of the entertainment is the person liable to pay the tax. All the same, it is the individual gambler's entertainment expense on which the tax is levied because the entertainment tax is aimed at burdening the gambler's economic performance which is expressed by the use of his or her income for the entertainment. As the Federal Constitutional Court has already decided several times, this makes the individual, real entertainment expense the most appropriate standard for such a tax.

However, constitutional law does not restrict the legislature to applying such a standard, i.e. a standard which is oriented towards reality. When opening up a tax source that concerns the individual's entertainment expense, the legislature has a far-reaching freedom of drafting. This especially applies, inter alia, to the choice of the standard of taxation. Article 3.1 GG sets a limit to the legislature's freedom of drafting only where a plausible reason for equal treatment or unequal treatment is lacking, which would make it arbitrary.

If in entertainment tax law, the legislature, however, chooses a substitute standard or a probability-oriented standard instead of the reality-oriented one, it is restricted in its choice to a standard that makes a certain entertainment expense at least probable. The need of justification for choosing a substitute standard increases the more the further the standard which is chosen in the individual case is removed from the actual reason for the burden. The substitute standard of a gaming machine tax must have, at any rate, at least a loose connection to the gambler's entertainment expense because the substitute standard makes use of the legislative latitude with regard to the closeness of tax assessment to reality; this latitude, however, does not provide an exemption for the necessary orientation of the tax, as regards its content, towards the reason for the burden.

The standard provided in § 4.1 SpStG, which is based on the number of units, transgresses this latitude and thus leads to an unequal burdening of the gaming machine operators. According to the submitting court's findings, the standard has proven generally unsuitable in the territory of the Free and Hanseatic City of Hamburg because it is structurally unsuitable to guarantee the necessary connection to the gamblers' entertainment expense. There is no longer a valid justification for using the substitute standard nevertheless.

The application of the number-of-units standard according to § 4.1 SpStG leads to the equal treatment of facts that are essentially unequal. According to this standard, the tax on the operation of coin slot machines is the same, irrespective of the entertainment expense incurred by the users of the gaming machines at the different machines in the respective taxation period; the only difference that is made is the one between the operation of gaming machines in amusement arcades and in other locations. As regards the ranges of variation as regards the amounts brought in by the gaming machines that have been ascertained, they are so significant that there can no longer be any question of a sufficient connection, which is necessary for an entertainment tax, between the taxation standard and the taxable entertainment expense in the area of application of the Hamburg Gaming Machine Tax Act. With variations of several hundred per cent of the amounts brought in, variations which exist not only in individual cases but almost as a general rule, any correlation between the - mere - operation of slot machines and the gamblers' entertainment expense is lacking, irrespective of whether the expense is measured according to income brought in or according to the stake per game.

Earlier assumptions made by the Federal Constitutional Court to justify the suitedness of the number of units as a taxation standard for gaming machines (see Decisions of the Federal Constitutional Court (Entscheidungen des Bundesverfassungsgerichts - BVerfGE) 17, 476; 31, 8), which was followed by the older case-law of the administrative courts and finance courts, can no longer be upheld in view of the technical and economic development in this field and the concomitant possibilities of obtaining information. This particularly applies due to the fact that since 1 January 1997, only the operation of coin slot machines with a tamper-proof counter has been permissible, which has made it possible since that date to ascertain the gamblers' expense with sufficient reliability.

Apart from this, the unsuitability of the number of units as a standard for levying the gaming machine tax is not due to the special characteristics of the factual or legal situation in Hamburg but obviously has structural reasons with a view to the present situation on the gaming machine market. The number-of-units standard must
therefore deemed generally unsuitable for assessing the gaming machines tax because at best in more or less coincidental combinations of individual circumstances can it ensure the sufficient connection between tax assessment and the gambler's entertainment expense, which is required by the precept of the equality of tax burdens. In recent times, for instance, no positive evidence could be produced for the required connection to the figures compiled, which should at least be a loose one. Apart from this, the difficulties involved in producing the evidence of this content-related connection, and the insecurities as regards the existence of the connection - assuming that it could be established in the individual case - are so serious that neither the person liable to pay the tax nor the ultimate taxpayer can be reasonably expected to accept the use of such a standard; it is also not practicable for the tax administration.

Other factual reasons, in particular practicability, the assumption of an internal compensation of burdening among the gaming machine operators, the pursuit of steering objectives and the possible lack of a different, admissible method, cannot justify retaining the number of units as taxation standard in this factual situation.

It is also not apparent that a standard which is closer to reality were not available be because a standard that would be more strongly oriented towards the gamblers' expense would not be compatible with Community law.

Thus the unconstitutionality of the tax assessment challenged in the original proceedings follows from the inadmissibility of the number of units as taxation standard. However, it does not additionally result from the impossibility of shifting the tax towards the gamblers. If the tax is geared towards the tax burden being shifted from the person liable to pay the tax to the ultimate taxpayer, this is sufficient, even if the shift does not successfully take place in every individual case. No indications are apparent for a shift being factually impossible. By contrast, even under the application of § 4 Abs. 1 SpStG, the entrepreneurs retained the possibility of working towards an increase in turnover, for instance by choosing suitable locations for the amusement arcades, and by designing and equipping them accordingly, and by restricting their own cost to what is absolutely necessary in order to be able to earn not only what is needed for paying the tax, but also for making a profit.

The unconstitutionality of § 4.1 SpStG does not result in its nullity. What is established is only the incompatibility of the provision with Article 3.1 GG. The gaming machines tax can be levied according to the number-of-units standard set out in § 4.1 SpStG for a transitional period until the entry into force of the Gaming Entertainment Tax Act in Hamburg on 1 October 2005.

European Parliament: No political support for an EU harmonised legislation for online gaming and betting

2009-03-10T12:19:00.001Z

Press relesa of EGBA

Today’s adoption of an own initiative report by the European Parliament on “The integrity of online gambling” is overshadowed by the support of a wide range of Members of the European Parliament (MEPs) to an alternative report.

The alternative report was backed by MEPs representing at least 9 Member States and the three main European political parties. It seeks to approach online gaming and betting in a more practical way, in line with the cross-border nature of the sector and taking into consideration both the challenges and opportunities offered in this area by the Internet technology.

The European Gaming and Betting Association (EGBA) welcomes this alternative report, which reflects an important move within the European Parliament towards more workable solutions.

The confusing majority report lead by Danish socialist MEP Schaldemose, indeed calls on the Commission to “carry out studies and make appropriate proposals” while insisting at the same time on “the Member States right to regulate (the online gaming sector) in accordance with their traditions and cultures”. This report being split between a national or a community approach, therefore fails to make any clear recommendation on actions to be taken.

What is clear however is that no harmonised EU legislation is foreseeable in the near future due to lack of political will of both Member States and the European Parliament. This was first evidenced by the discussions within the Council initiated recently by the French Presidency and now by clear divisions amongst MEPs expressed in the context of the own initiative report.

So what’s next?

The establishment of a European Code of Conduct, supported by the alternative report, currently appears as the best practical option in the near future to ensure that EU licensed operators offering their services cross-border abide throughout the EU to a common and consistent set of responsible standards.

Sigrid Ligné, Secretary General of the EGBA said “Today’s vote shows that we cannot expect an EU harmonised legislation to be adopted in the near future. This clearly means that it is the rules of the Treaty and the case law of the Court of Justice that continue to apply and that will prevail for our sector in the years to come”.

The only tangible EU initiatives in the pipeline to enforce the right of EU operators to a non-discriminatory market access are the current infringements which were launchedby the Commission some years ago. These infringements need now urgently to be brought to the next level with all non-cooperative Member States including Germany, Sweden or Denmark.

With the Acquisition of Expekt and Bet-at-home, French Group MANGAS GAMING Enters the Top 5 Online Sports Betting Players in Europe

2009-03-06T12:47:00.003Z

press release of MANGAS GAMING

Paris - MANGAS GAMING, French leading group in online gaming and sports betting, which operates Betclic, active in France and Southern Europe, announces the two following transactions:

- The acquisition of all the operations of Expekt, a major
online sports betting company, addressing primarily the Scandinavian
and Northern European markets. Expekt is also a major player in online
poker.

- The acquisition of a controlling stake in Bet-at-home from
its founders. Bet-at-home, a Frankfort listed company, is an online
betting and gaming operator mainly present in Central and Eastern
Europe. A public offer will be launched shortly to acquire the shares
held by Bet-at-Home's minority shareholders.

Both transactions benefit from the full support of the management of the acquired companies.

With these acquisitions, MANGAS GAMING, enters the top 5 online sports betting operators in Europe, with gross gaming revenues amounting to around 200 million euros in 2009, over 4 million registered clients and a staff of about 500 people.

Present in more than 25 countries, the group now benefits from a balanced breakdown of its activities over continental Europe while maintaining a strong focus on local market expertise, and offers its services through websites in 24 different languages.

MANGAS GAMING, managed by Isabelle Parize, plans to pursue its pan-European development in a fast-growing industry.

Both transactions, which remain subject to customary regulatory approvals, will be financed through the existing resources of MANGAS GAMING, which is co-controlled by Financiere Lov, Stephane Courbit's patrimonial holding company, and Societe des Bains de Mer (SBM).

Lazard acted as exclusive financial adviser to MANGAS GAMING in these transactions.

Referral to ECJ with regard to the jurisdiction for claims against bookmakers

2009-03-04T11:48:00.001Z

Reference for a preliminary ruling from the Cour d'appel de Liège (Belgium) lodged on 29 December 2008 - Real Madrid Football Club, Zinedine Zidane, David Beckham, Raul Gonzalez Blanco, Ronaldo Luiz Nazario de Lima, Luis Filipe Madeira Caeiro, Futebol Club Do Porto S.A.D., Victor Baia, Ricardo Costa, Diego Ribas da Cunha, P.S.V. N.V., Imari BV, Juventus Football Club SPA v Sporting Exchange Ltd, William Hill Credit Limited, Victor Chandler (International) Ltd, BWIN International Ltd (Betandwin), Ladbrokes Betting and Gaming Ltd, Ladbroke Belgium S.A., Internet Opportunity Entertainment Ltd, Global Entertainment Ltd (Unibet)

(Case C-584/08)

Language of the case: French

Referring court

Cour d'appel de Liège

Parties to the main proceedings

Appellants: Real Madrid Football Club, Zinedine Zidane, David Beckham, Raul Gonzalez Blanco, Ronaldo Luiz Nazario de Lima, Luis Filipe Madeira Caeiro, Futebol Club Do Porto S.A.D., Victor Baia, Ricardo Costa, Diego Ribas da Cunha, P.S.V. N.V., Imari BV, Juventus Football Club SPA

Respondents: Sporting Exchange Ltd, William Hill Credit Limited, Victor Chandler (International) Ltd, BWIN International Ltd (Betandwin), Ladbrokes Betting and Gaming Ltd, Ladbroke Belgium S.A., Internet Opportunity Entertainment Ltd, Global Entertainment Ltd (Unibet)

Questions referred

The questions relate to the interpretation to be given, in the specific field of the internet, to Article 5(3) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. 1

Where, as in the present case, the alleged harm is caused by websites and

(a) none of the companies being sued, which run the websites in question, has its company seat in Belgium,

(b) none of the websites in question is hosted in Belgium,

(c) none of the claimants is domiciled in Belgium,

(d) the betting websites are available to Belgian internet users, who can place their bets on those sites, to the same extent as they are available to internet users in other contracting States since they are '.com' websites which have the purpose of extending their market to the whole of Europe, and they do not have the extension '.be' which is specific to Belgium,

(e) those websites are available in a number of languages without the two most commonly used languages in Belgium always being among them,

(f) those websites offer, inter alia, bets on Belgian matches, in the same way as for foreign championships,

(g) the use of a particular technology or canvassing technique aimed at the Belgian public has not been proved,

(h) the number of bets placed by the Belgian public is entirely marginal in comparison with the total number of bets taken by those sites, since, according to the figures submitted by the bookmaking companies for 2005, which were not disputed, all the Belgian betting on football matches represents less than 0.25% of the bets taken on the websites 'bwin.com', 'willhill.com', 'betfair.com', 'ladbrokes.com', 'sportingbet', and 'miapuesta', while 'vcbet.com' refers to 40 Belgian bettors among all the bets placed with it,

1. should it be held that the alleged harm occurred or is liable to occur in Belgium, so that the Belgian courts have jurisdiction to hear the actions relating to that harm because the websites in question are directed, inter alia, at the Belgian public?

2. or should it be held that the alleged harm occurred or is liable to occur in Belgium, so that Belgian courts have jurisdiction to hear the actions relating to that harm, only if the existence of a sufficient, substantial or meaningful connection between the tortious events pleaded and Belgian territory is established?

3. if so, what are the relevant criteria to be taken into consideration in assessing whether such a connecting factor exists?

____________

1 - OJ 2001, L 12, p.1.

EGBA: Online gaming and betting industry sends sports integrity message to the EU

2009-02-17T17:40:00.001Z

Licensed online operators underline the traceability and transparency of the internet to safeguard the integrity of sports

At the EGBA’s ‘Responsible Gaming Day: Integrity & Sport’ event at the European Parliament today, key stakeholders called on the EU to make fact-based decisions when addressing the role of the Internet in sports integrity.

The event, in its second year at the European Parliament in Brussels, was attended by MEPs, the EU Czech Presidency, regulators, academics, representatives from the sporting world (UEFA, FIFA) and leading industry figures. Delegates discussed the role of the Internet as a tool to improve consumer protection and fraud prevention, with a particular focus on the field of sports betting integrity.

Norbert Teufelberger, Chairman of the European Gaming and Betting Association (EGBA) said: “Experts made it clear today how the Internet can be used for transparency, prevention and integrity purposes in the gaming and betting industry”.

With one of the morning sessions addressing the concerns around online problem gaming, Prof. Dr. Howard Shaffer from the Harvard Medical School, stressed: “The internet allows us now to scientifically study the actual gaming behaviour of players rather than rely on what they say or remember. The findings have shown us that the overwhelming majority of players gamble online in a very moderate and mild way”.

With the afternoon session focusing on the connection between integrity and sports, Norbert Teufelberger added: “The discussion today has shed more light on the various risk factors and respective responsibilities of the different stakeholders in the sport chain to maintain integrity”.

Christofer Fjellner, conservative MEP from Sweden, added: “Today’s experts showed that the Internet offers more possibilities rather than less in terms of preventing fraud and match fixing”.

All relevant sports stakeholders stressed in any case the need for greater cooperation and shared responsibility. This was echoed by Paul Scotney, Director Integrity Services and Licensing of the British Horseracing Authority “Keeping the sports clean can only work if there is meaningful cooperation between the sports sector, the regulators and the betting operators”.

Khalid Ali, Secretary General, European Sports Security Association (ESSA) then clarified how existing tools provided by the sports betting industry are helping sport federations maintain the highest standards of sporting integrity: “Our early warning alerts mean that we can work hand in hand with sports regulators and prevent the possibility of sport manipulation. The information provided to the sports federations is free of charge, with all the costs being borne by the online operators that are members of ESSA.”

You can find more details of the event on: www.ResponsibleGamingDay.eu

EGBA hosts second Responsible Gaming Day at the European Parliament

2009-02-16T10:41:00.001Z

Expanded 2009 event to focus on Integrity & Sport

Following on from a highly successful inaugural event in 2008, the European Gaming and Betting Association (EGBA) is hosting a second ‘Responsible Gaming Day’ at the European Parliament in Brussels on Tuesday, 17 February. The event aims to facilitate a major EU policy discussion, with this year’s theme focusing on the key gaming issues of ‘Integrity and Sport’.

The ‘Responsible Gaming Day: ‘Integrity and Sport’ will be an opportunity for public and private sector stakeholders to examine the key issues of integrity in gaming, sport and bookmaking ethics and how to tackle potential fraud within the sports betting sector. The issue of integrity remains a top priority for private European online operators, who are committed to ensuring a highly secure gaming environment for their customers.

The ‘Responsible Gaming Day: Integrity & Sport’ will features keynote speeches by the Czech EU Presidency, Norbert Teufelberger, EGBA Chairman and Co-CEO of bwin, MEPs from Sweden, the UK, the Netherlands and Petter Nylander, CEO of Unibet. This year’s programme addresses the key issues around online gaming, ethics in sports bookmaking and the tools and safeguards available to tackle risk in sports betting. It will include prominent speakers from the European Commission, private and state-owned industry, academia and leading sporting associations and clubs.

“Our second Responsible Gaming Day comes at time when online gaming and related sporting issues are being debated at the highest levels of the EU” said Norbert Teufelberger, Chairman of the EGBA. “We aim to encourage all parties to enter into dialogue to ensure the best practice in the field of responsible gaming informs modern EU policy developments.”

You can find more details of the event on: www.ResponsibleGamingDay.eu

For further information or comment please contact:

Sigrid Ligné
+32 (0) 2 256 7527
egba@egba.eu

Online gaming and betting: Proposed changes to Finnish lotteries act raise European Commission concerns even further

2009-02-13T14:38:00.001Z

Brussels, 12 February 2009

The European Gaming and Betting Association (EGBA) welcomes the European Commission’s decision to issue formal Comments (1) against the proposed changes to the Finnish lotteries act. These changes, if implemented, would increase the extent of the breach of EU law that is already the subject of an EC infringement procedure.

The European Commission has already objected to the existing Finnish gaming legislation back in March 2007 when it issued a “Reasoned Opinion” the last procedural stage before a referral to the European Court of Justice.

The new draft provisions introduce even further restrictions on indirect marketing of gambling services for operators without a Finnish license, as well as fines and prison sentences of up to two years for both media and online gaming companies operating or marketing such activities. These additional restrictions are, however, not aimed at enhancing consumer protection in a consistent and systematic manner as they will not apply to the Finnish government’s own gambling activities which will still be allowed to conduct extensive and aggressive marketing campaigns. RAY (the Finnish Slot Machine Association) has even announced its intention to launch an internet poker site later this year.

According to Sigrid Ligné, EGBA Secretary General: “This shows all too clearly that the Finnish authorities have for the past two years - during which the Commission has been delaying Finland’s referral to the ECJ - enhanced their protectionist legislation rather than removed it”.

She concludes that: “The rights of EU licensed gaming and betting operators as well as those of Finnish newspapers and media have been ignored for too long and the situation is only deteriorating. The Commission’s patience has clearly not paid off. We now call on the Guardian of the Treaty to defend our rights and to bring Finland to the ECJ.”

The Finnish changes to the lotteries act were notified to Commissioner Verheugen’s services and Member States under Directive 98/34/EC in November 2008. The notification procedure is aimed at preventing Member States from creating new barriers to the internal market freedoms by giving the opportunity to the Commission and Member States to evaluate the content of a draft law before it is adopted.

(1) Comments issued by the European Commission in the context of the notification procedure mean that it considers that the text submitted raises issues or requires further details for clarified interpretation.

For further information on the Commission notification procedure, please see:
http://ec.europa.eu/enterprise/tris/pisa/app/search/index.cfm?fuseaction=pisa_notif_overview&iYear=2008&inum=492&sNLang=FR&lang=en

For further information or comment please contact:

Sigrid Ligné
+32 (0) 2 256 7527
egba@egba.eu

About EGBA:

The EGBA is an association of the leading European online gaming and betting operators Bet-at-home.com, bwin, Digibet, Expekt, Interwetten, PartyGaming and Unibet. EGBA is a Brussels-based non-profit making association. It promotes the right of private gaming and betting operators that are regulated and licensed in one Member State to a fair market access throughout the European Union. Online gaming and betting is a fast growing market, but will remain for the next decades a negligible part of the overall European gaming market in which the traditional land based offer is expected to grow from € 85 Billion GGR in 2008 to € 93 Billion GGR in 2012, thus keeping the lion’s share with 88,1% of the market. Source: H2 Gambling Capital, January 2009.

www.egba.eu
www.responsiblegamingday.eu

Court of Appeal of Versailles orders access to the Reasoned Opinion and the hearing of the Secretary General for European Affairs

2009-02-06T16:22:00.002Z

Online Gaming and Betting/ Unibet-MrBookmaker case: The Court of Appeal of Versailles orders access to the Reasoned Opinion and the hearing of the Secretary General for European Affairs

The access to the Reasoned Opinion, previously refused by the instructing judge, has been requested by the defendants for months as a key piece of evidence. This confidential document lists all the violations of EU law that the European Commission holds against the French gambling legislation, in particular with regard to the Française de Jeux and PMUs monopolies on online sports and horse betting.

The Court of Appeal of Versailles today issued long awaited decisions in the criminal proceedings initiated in 2007 against Petter Nylander, CEO of the online gaming company Unibet, listed on the Stockholm Stock Exchange and holding licences in Italy, Malta and the UK, and Didier Dewyn, former CEO of Mr Bookmaker.

By deferring its judgement allowing the litigants to have access to the Reasoned Opinion addressed by the European Commission to France on June 27, 2007 (1) and seeking to hear for the first time in this case, a high civil servant, Gilles Briatta, Secretary General for European Affairs, the Court of Appeal reaffirms existing doubts regarding the compatibility of the French gaming legislation with European Law.

EGBA welcomes these decisions as an important development in the cases against Petter Nylander, Didier Dewyn and other European CEOs, who have been subject to arrests - including the use of an European Arrest Warrant – and indictments.

According to Sigrid Ligné, Secretary-General of EGBA, “These decisions raise once more the fundamental question of the legal base of these criminal proceedings. The infringements the European Commission listed in its Reasoned Opinion against the French Law shall also allow it to evaluate the compliance of the forthcoming draft bill with European law.”

The decisions follow the judgement of the Court of Appeal of Versailles dated January 18, 2008 in the proceedings engaged against Didier Dewyn, which requested additional information regarding the compliance of the French Law with EU Law and in particular access to the Reasoned Opinion addressed by the European Commission to France.

EGBA recalls that doubts regarding the French legislation’s compliance with European law have not only been voiced by the European Commission, but have also been confirmed by the Court of Cassation on July 10, 2007, by the State Council on May 9, 2008 and finally by the French Government itself in the context of the announced reform of the gambling law. To maintain an indictment based on the alleged infringement of such legislation would imply accepting the concept of preventive indictment, which is impossible under French law.

The EGBA recalls that these decisions come at a time when the European Commission has been waiting for 21 months for a new French bill which is expected to put an end to the multiple infringements of EU law and in particular to the “criminal sanctions [that] have been threatened or imposed on the chief executives of sport betting companies licensed in other Member States” (http://europa.eu/rapid/pressReleasesAction.do?reference=IP/07/909&format=HTML&aged=0&language=EN&guiLanguage=en). If the draft bill is not formally notified to the European Commission services in the shortest timeframe possible, the European Commission may move to the contentious stage of the infringement proceedings and refer the matter to the European Court of Justice.

press release of EGBA European Gaming & Betting Association

Gambling monopoly: question to the European Commission

2008-12-23T11:24:00.002Z

ORAL QUESTION for Question Time at the part-session in December 2008 pursuant to Rule 109 of the Rules of Procedure by Karin Riis-Jørgensen to the Commission

Subject: Liberalisation of the national gambling monopoly

Between 6 and 8 November 2008 in Greece (Athens and Thessaloniki), two intermediaries from a private sports betting operator licensed and regulated in the EU were arrested and detained by the Greek authorities along with three customers for violating the Greek sports betting monopoly legislation.

That legislation is already the subject of a Reasoned Opinion sent by the European Commission on 28 February 2008 in the wider context of infringement proceedings launched against 10 Member States over the last two and a half years.

Given Paragraph 73 §4(1) of the Placanica ruling by the ECJ (C-338/04) does the Commission find such arrests disproportionate?

Why is the Commission not proceeding more rigorously and referring to the ECJ countries at Reasoned Opinion level like Greece or Denmark, Sweden, Finland, and the Netherlands, which have clearly, through actions like the ones above in Greece, or through complete inaction, showed that they refuse to comply with the EU Treaty?

____________________

(1) Articles 43 EC and 49 EC must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which imposes a criminal penalty on persons such as the defendants in the main proceedings for pursuing the organised activity of collecting bets without a licence or a police authorisation as required under the national legislation, where those persons were unable to obtain licences or authorisations because that Member State, in breach of Community law, refused to grant licences or authorisations to such persons.

H2 Q3 eGambling Data Bulletin – Downturn to Strengthen eGaming's Hand

2008-12-18T22:55:00.001Z

H2 have released their Q3 eGambling Data Bulletin based on all of the Q3 results and trading statements as well as our analysis of traffic and industry news flow until the end of November.

The covering paper concludes that:

- The eGambling Industry will be resilient but not immune to the global recession;
As some economies are in danger of collapsing during 2009 the fortunes of individual operators are difficult to call at this stage;

- eGambling is expected to strengthen its long term position as recession pushes more cash strapped governments to deregulate;

- For the first time H2 see more European Union Member States supporting eGambling rather than opposing it as debate moves to the level of taxation and establishment criteria;

- The US is now expected to move to legalise eGaming (excluding sportbetting) with federal legislation likely to permit states to opt in/out – However, legislation is not expected until the 112th Congress with no activity until 2013;

- In the meantime any effective implementation of UIGEA by December 2009 could impact the businesses of the operators that continue to accept US players.

See all of H2's 2009 forecasts on a market-by-market and product-by-product basis in the most detailed and authoritive assessment of the value and player volume of the interactive gambling industry. The summary industry dataset includes nearly 25,000 data points dating back to 1999 (with over 50 national by product splits from 2003) and forecasts out to 2012.

press release of H2

Online betting and gaming: Opinion of the French Advocate General on the Portuguese gaming monopoly in the bwin Liga case

2008-10-22T16:56:00.002Z

The European Gaming and Betting Association (EGBA) welcomes today’s opinion by the Advocate General in a betting case involving EGBA member bwin and Portuguese monopoly Santa Casa da Misericórdia (SCML) in the context of bwin’s sponsorship deal with the Portuguese professional football league.

Whereas the Gambelli and Placanica cases in 2003 and 2007 dealt with sports betting concessions in Italy, today’s conclusion by the Advocate General addresses the legitimacy of the Portuguese gambling monopoly. It is in line with the jurisprudence of Gambelli and Placanica and supports the arguments already put forward by bwin and EU licensed operators.

Answering a key question, the Advocate General stated that the extension of the monopoly to internet activities should have been notified to the European Commission and therefore will not be applicable against bwin and the Liga, and the national court must decline to apply it.

According to the French Advocate General Bot, the Portuguese monopoly on the internet may comply with Community law if certain conditions are met.

According to Sigrid Ligné, Secretary General of the EGBA: “Considering the facts in the present case, we strongly believe that those conditions are not met and that the Portuguese monopoly is not consistent with EU law”.

Former Advocate General Alber comments: “All conditions and controls can equally be fulfilled by EU licensed private operators”.

Indeed, a monopoly is not necessary to fight crime and to protect consumers as evidenced in multi-operator and regulated jurisdictions such as the United Kingdom, Malta or Austria.

Today’s opinion takes place in the context of an increasing number of requests for preliminary rulings (17 in total) to the ECJ by national courts and at a time when the Commission in parallel is to decide whether to refer a number of Member States to the ECJ over the compatibility of their gaming legislation with EC law.

This opinion is not binding on the ECJ and the EGBA expects the final ruling on the case in the beginning of 2009.

press release of EBGA, 14 October 2008

Portugal: Discriminatory taxation of gambling winnings?

2008-09-23T14:58:00.001Z

European Commission Threatens to Refer Portugal to the ECJ

The European Commission has sent Portugal a formal request to amend its discriminatory rules that provide for the taxation of foreign lottery winnings, despite winnings from lotteries organised in Portugal being exempt from income tax.

According to the Portuguese rules, income earned in Portugal in the form of prizes or winnings from competitions, games or gambling is subject to taxation. However, an exemption applies to lottery winnings from Euromilhões e Liga dos Milhões, lotteries and games organised by the Portuguese monopoly Santa Casa da Misericórdia de Lisboa, which also carries out activities of social interest within the country.

The Commission considered that the exemption provided in the Portuguese legislation constituted a discrimination prohibited by the EC Treaty, as the favourable treatment is not open to other EU entities also carrying activities of social interest similar to Santa Casa da Misericórdia de Lisboa.

The Commission stated that taxing the winnings from foreign but not national lotteries cannot possibly be justified as a measure to avoid the damaging consequences of gambling.

The Commission therefore considers these rules to be contrary to the EC Treaty and the EEA Agreement, as they restrict the freedom to provide services. This request is in the form of a reasoned opinion, the second stage of the infringement procedure under Article 226 of the Treaty.

http://gamingintelligencegroup.com

French Council of State refers question of compatibility of a betting monopoly with Community law to the European Court of Justice

2008-07-28T01:41:00.001+01:00

by attorney-at-law Martin Arendts, M.B.L.-HSG

In addition to the references of two Dutch supreme courts (cf. German Gaming Law updated, no. 106 and 107), the French Council of State (Conseil d’État), in its capacity as France’s supreme administrative court, has referred questions regarding the compatibility of a betting monopoly with Community law to the European Court of Justice (ECJ) for preliminary ruling (order of 9 May 2008, decision no. 287503).

The proceedings were initiated by the Malta based bookmaker ZETurf (Zeturf Limited), who sought revocation of a statutory instrument (decret no. 97-456 of 5 May 1997), which establishes a monopoly for the horse betting provider Pari Mutuel Urbain (PMU), founded in 1930, from the competent French Ministry of Agriculture. The bookmaker ZEturf, state licensed in Malta, an EU member state, argued that the betting monopoly was incompatible with Community law. As the Ministry of Agriculture showed no reaction, ZEturf filed action against this implicit refusal with the Conseil d’État on 25 November 2005.

ZEturf’s action has to be seen against the backdrop of the decision of the Tribunal de grande instance de Paris which, by decision of 8 July 2005, prohibited this bookmaker from accepting horse bets. This prohibition which was affirmed in the appeal, was repealed by a fundamental decision of the Court of Cassation (Cour de Cassation) of 10 July 2007, in particular reasoned on the basis of Community law.

The Council of State (Conseil d’État) has now decided to refer the question of compatibility of the French horse betting monopoly with Community law to the ECJ in accordance with Art. 234 EC Treaty. In this respect, the Conseil d’État asked the ECJ two questions. In essence, the Council of State inquires whether the freedom to provide services guaranteed in Art. 49 and 50 of the EC Treaty is to interpreted to the effect that it precludes a national legislation which establishes a monopoly regime in favour of a single provider, that is meant to combat crime and protect public order in a more efficient way than by less interfering action, if that regime is accompanied by a dynamic commercial policy on the part of the operator, so that a satisfactory reduction in gaming opportunities is not achieved. One aspect of this question is the necessity to be assessed as part of the proportionality test, that is the examination into alternatives to the monopoly legislation and the question as to less interfering action (considering the Rosengren decision, discussed at the oral hearing in the Case “Liga Portuguesa”- C-42/07). Another already critical point is the question whether a monopoly is legally tenable, where a monopoly undertaking, such as the economically very successfully acting operator PMU, does by no means limit gaming opportunities but seeks to increase its turnover instead. In addition to this, with his second question referred for preliminary ruling, the Conseil d’État asks whether, when assessing the justification of the impairment of the freedom to provide services, one had to take into consideration the online-offer alone or all forms of distribution.

In view of the now 16 pending proceedings for preliminary ruling relating to bets and games of chance (including three referred by national supreme courts) as well as numerous upcoming actions in infringement proceedings (after the first action against Spain for discriminatory taxation of winnings resulting from games of chance), one can now expect the ECJ to comprehensively clarify the legal questions raised.

* * *

Questions, referred to the ECJ by the Council of State:

1. Are Articles 49 and 50 of the Treaty establishing the European Community to be interpreted as precluding national legislation which has established a system whereby off-course horserace betting is managed exclusively by a single, non-profit-making operator where, although that system appears to fit the purpose of combating criminality and thus of protecting public order more effectively than would less restrictive measures, it is accompanied by a dynamic commercial policy on the part of the operator, in order to neutralise the risk of unauthorised gambling networks emerging and to channel bettors towards the lawful offer, that does not, in consequence, fully achieve the objective of reducing gambling opportunities?

2. Is it appropriate, in order to determine whether national legislation such as that in force in France, which has established a system whereby off-course horserace betting is managed exclusively by a single, non-profit-making operator, is contrary to Articles 49 and 50 of the Treaty establishing the European Community, to assess the impairment of freedom to provide services solely from the point of view of the restrictions placed on offering on-line horserace betting, or is it appropriate to take into consideration the entire horserace betting sector in whatever form it is offered and is accessible to bettors?

from: German Gaming Law updated No. 110

Administrative Court of Berlin repeals prohibition order against a sports betting agent issued by the State of Berlin

2008-07-28T01:20:00.001+01:00

Sports betting monopoly de facto terminated

by attorney-at-law Martin Arendts, M.B.L.-HSG

The Administrative Court of Berlin (Verwaltungsgericht Berlin) had already voiced fundamental doubts regarding the constitutionality of the Interstate Treaty on Gambling in several summary proceedings during the last months and has thus granted relief from judicial execution to the sports betting agents involved (cf. German Gaming Law updated No. 102). The Administrative Court of Berlin has now repealed a prohibition order issued by the State Office for Citizens’ and Police Affairs (Landesamt für Bürger- und Ordnungsangelegenheiten), holding it to be unlawful (decision of 7 July 2008, file no. VG 35 A 167.08). The claimant, represented by ARENDTS ANWÄLTE (www.gaminglaw.de), can thus continue to transfer sports bets to a bookmaker licensed in Malta, an EU member state.

This new decision involves a prohibition order of 6 March 2008 based on the Interstate Treaty on Gambling (Glücksspiel-Staatsvertrag) and the corresponding implementation act (Ausführungsgesetz zum Glücksspiel-Staatsvertrag - AG GlüStV). The detailed reasons are still due. However, as reported, the court had already voiced considerable doubts in the proceedings for relief from execution as to whether the new regulations could constitute a constitutional authority. The state sports betting monopoly, as a considerable interference with the private sports betting providers’ and agents’ right to choose their profession was not justifiable from a constitutional point of view.

The Administrative Court of Berlin explicitly allowed appeal against this decision which will have to be reviewed by the Administrative Court of Appeal of Berlin-Brandenburg (Oberverwaltungsgericht Berlin-Brandenburg). In view of the scope of the decision, which declares the Interstate Treaty on Gambling to be untenable and contrary to constitutional law, one has to assume that the State of Berlin will exhaust this legal remedy. For the time being, though, the state monopoly has de facto ended, since the market for sports betting in Berlin cannot be sealed off from bookmakers, licensed in other EU member states, anymore.

from: German Gaming Law updated No. 109

Administrative Court of Freiburg grants sports betting agent relief from judicial execution: German sports betting monopoly in breach of Community law

2008-07-28T01:05:00.001+01:00

by attorney-at-law Martin Arendts, M.B.L.-HSG

In four judgments rendered in main proceedings, the 1st chamber of the Administrative Court of Freiburg (Verwaltungsgericht Freiburg) just recently declared the state sports betting monopoly to be in breach of Community law and revoked prohibition orders issued by the Regional Council of Karlsruhe (decisions of 16 April 2008, file-no. K 2683/07, 1 K 2063/06, 1 K 2066/06 and 1 K 2052/06). The 3rd chamber of the Administrative Court of Freiburg has now joined this legal opinion in summary proceedings. The agent, represented by attorney-at-law Alice Wotsch of ARENDTS ANWÄLTE (www.gaminglaw.de), can thus continue to transfer sports bets to his contractor, an EU-licensed bookmaker (decision of 30 June 2008, file-no. 3 K 1113/08).

In the court’s opinion, the motion for protection is justified irrespective of the question whether the applicant is operator of the game of chance or not. The State of Baden-Württemberg’s sports betting monopoly being in breach of Community law, the agents’s interest to be spared of the consequences of judicial execution until a final decision in the main proceedings will be pronounced, prevails against the public interest in the execution. Moreover, it was not apparent, that there were currently specific dangers resulting from brokering sports bets.

from: German Gaming Law updated No. 108

ECJ: Brokering bets not exempt from Value Added Tax pursuant to the of Sixth Council Directive 77/388/EEC

2008-07-28T01:03:00.001+01:00

by attorney-at-law Martin Arendts, M.B.L.-HSG

The European Court of Justice (ECJ) has recently held that commissions paid to a sports betting agent is not exempt from VAT (order of 14 May 2008, Joined Cases C-231/07 and C-232/07). The Brussels Court of Appeal (Cour d’appel Bruxelles) had asked the ECJ for clarification as to whether an exemption pursuant to Art. 13 part B letter d no. 3 of the Sixth Council Directive 77/388/EEC should be considered, according to which the supply of certain financial services relating to turnovers resulting from the transfer of bets are exempt from VAT. Interpreting this directive, the ECJ declined this. The Belgian initial proceedings concerned tobacconists (“buralistes”) which accepted bets on behalf of a bookmaker and paid out the winnings to betting customers.

Operative part of the order:“

The terms 'transactions, including negotiation, concerning deposit accounts and payments' used in Article 13(B)(d)(3) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment are to be interpreted as meaning that they do not refer to the supply of services by an agent acting on behalf of a client which carries out the activity of accepting bets on horse races and other sporting events, consisting of acceptance by the agent of bets on behalf of the client, registration thereof, confirmation to the client, by presentation of the betting slip, that a bet was made, collection of funds, payment of winnings, sole assumption of liability as regards the client for management of the funds collected and for thefts and/or losses of money and receipt of remuneration in the form of commission from the client as remuneration for that activity.”

from: German Gaming Law updated No. 108

Dutch Council of State refers legitimacy and tendering of a sports betting monopoly to the European Court of Justice for review

2008-07-28T00:35:00.002+01:00

by attorney-at-law Martin Arendts, M.B.L.-HSG

In addition to the Dutch reference to the European Court of Justice (ECJ) by the Supreme Court of the Netherland in the case of Ladbrokes (cf. German Gaming Law updated no. 106), the Raad van State, in its capacity as the highest administrative court of the Netherlands, has referred a case to Luxembourg (decision of 14 May 2008, file-no. 200700622/1). This reference has been filed with the ECJ as Case C-203/08. The referral is based on administrative proceedings between the world’s largest betting exchange Betfair (Sporting Exchange Ltd.) and the Dutch Minister of Justice.

Hence, within one month, two last instance courts have referred questions relating to the admissibility of the Dutch sports betting monopoly to the ECJ. National last instance courts are obliged to refer Community law related preliminary questions to the ECJ, which has the monopoly on the interpretation of EU law, provided that these legal question are not yet resolved (acte clair theory). Due to these references, a planned reorganisation of the gaming law in the Netherlands was put off. It was planned i.a. to grant Holland Casinos an exclusive online gaming license.

As it was the case in several pending proceedings, there is the question of the relevance of a license issued in another Member State in this case as well. The reference by the Raad von State does, by the way, concern the tendering of a gambling license as well. In particular, Betfair applied for two gambling licenses after the Minister for Justice had refused to declare the UK based betting exchange’s access to the market to be unobjectionable. On the one hand side, Betfair applied for the 5-year sports betting license, currently held by the monopoly operator De Lotto (Stichting de Nationale Sporttotalisator), while on the other hand applying for the license currently held by Scientific Games Racing B.V. However, the Ministry took the view that the licenses were to be extended as long as the current license holder wished to continue.

Betfair considered this to be in breach of Community law and an undue discrimination and, in particular, invoked the freedom to provide services as guaranteed by the EC Treaty. Commenting on the reference order, Betfair pointed to the fact that I was a strictly regulated, tax paying, UK based company which was a global leader in terms of fraud prevention and customer protection. One should therefore allow fair competition within the EU.

The Raad von State referred following questions to the ECJ :

1. Should Article 49 EC be interpreted as meaning that, where a closed licensing system is applied in a Member State to the provision of services relating to games of chance, the application of that article precludes the competent authority of that Member State from prohibiting a service provider to whom a licence has already been granted in another Member State to provide those services via the internet from also offering those services via the internet in the first Member State?

2. Is the interpretation which the Court of Justice has given to Article 49 EC, and in particular to the principle of equality and the duty of transparency arising therefrom, in a number of individual cases concerning concessions applicable to the procedure for the granting of a licence to offer services relating to games of chance under a statutorily established single-licence system?

3. (a) Under a statutorily established single-licence system, can the extension of the licence of the existing licence-holder, without potential applicants being given an opportunity to compete for that licence, be a suitable and proportionate means of meeting the imperative requirements in the general interest which the Court of Justice has recognised as justifying restriction of the freedom to provide services in respect of games of chance? If so, under what conditions?

(b). Does it make a difference to the answer to Question 3(a) whether Question 2 is answered in the affirmative or the negative?

from: German Gaming Law updated No. 107

Court of Appeal of Munich enjoins the Free State of Bavaria from illegal gambling advertisement -

2008-07-27T14:31:00.003+01:00

State monopoly operators in breach of Interstate Treaty on Gambling

by attorney-at-law Martin Arendts, M.B.L.-HSG

The Centre for Protection against Unfair Competition (Wettbewerbszentrale) recently won a court suit in the second instance against the Free State of Bavaria who offers sports betting and games of chance commercially via its State Lottery Administration (Staatliche Lotterieverwaltung), which is a member of Deutscher Lotto- und Totoblock, the cartel of the monopoly operators. The Court of Appeal of Munich (Oberlandesgericht München) enjoined the Free State of Bavaria from unfair advertisements with regard to three different circumstances (decision of 22 April 2008, file-no. 29 W 1211/08 - not yet final).

According to the holding of the Court of Appeal of Munich, the advertisement challenged by Wettbewerbszentrale, which contains statements like “Join the game” and ”Lotto … current Jackpot: about 18 Mill. Euros”, unduly pushes the amount to be won in each following draw to the fore. Such an advertisement is in breach of sec. 5 (1) of the Interstate Treaty on Gambling (Glücksspiel-Staatsvertrag). Pursuant to this provision, in order to avoid the character of an incitement, advertisement for public games of chance must be confined to information and education on the options of taking part in games of chance.

Relating to this decision, attorney-at-law Dr. Andreas Ottofülling of the Centre for Protection against Unfair Competition explains: “It clearly shows that the Free State of Bavaria as operator of the lottery did not comply with the principles of advertisement set up by himself. The state cannot justify the monopoly on lotteries with the need to protect the citizens from gambling addiction on the one hand side and on the other hand boldly incite to participate in games of chance himself. “

The authorities’ pleading that the state lottery operators had substantially adjusted and retrenched their advertisement in view of the requirements set forth by the Federal Constitutional Court, is obviously not tenable in view of this decision. There is not only a clear regulatory deficit (as accurately pointed out by the Administrative Court of Berlin), but also a serious enforcement deficit remaining. Contrary to the requirements set forth by the Federal Constitutional Court, there is no independent supervision of the state operators, by which the monopoly operators’ illegal behaviour could be controlled.

The reasoning of the Court of Appeal of Munich for this decision have now been published (MD 2008, p. 709 et seq.). With regards to the Free State of Bavaria’s unfair advertisement practices the court explains:

“The newspaper advertisement pushes the amount to be won in the next draw to the fore as an eye catcher. Information other than this circumstance accounting for the particular attractivity of a participation in the game is only provided in considerably smaller script. There is a blatant imbalance between highlighting the amount to win and mentioning the danger of addiction and the low probability of winning, which does hardly show up in comparison. This imbalance of the advertisement, which results from one-sidedly highlighting the chance of a particularly high win, provides an increased incentive to participate in the lottery for people addressed by the advertisement. The informative and educational content which is allowed pursuant to sec. 5 (1) Interstate Treaty on Gambling is clearly only second to the presentation as advertisement with incitement to participate. This is in breach of sec. 5 (1), 5 (2) sentence 1 Interstate Treaty on Gambling.

The two other forms of advertisement (billboard and cover ads) have the character of the forbidden form of incitement even more, as they do not even contain minor disclaimers pointing to circumstances against the participation in the game, but places the amount to be won in a unique position. Doing so they are even in breach of no. 2 of the requirement of the directive for the prevention of- and fight against gaming addiction (Annex to the Interstate Treaty on Gambling), pursuant to which the information about the jackpot is to be combined with an information on the probability of winnings and losses. (…)

Regarding the advertisement on the cover of the magazine, one has to add, that, when assessing the determining general impression that the advertisement has on the relevant public it addressed, one has to consider the design of the rest of the cover – in particular the title “Join the game” also designed as an eye catcher – as well. Together with the title held in form of a command, highlighting the possible win does not only incite to participate in the game but also has a requesting effect.”

from: German Gaming Law updated No. 105

Supreme Court of the Netherlands refers sports betting monopoly to the European Court of Justice for review

2008-07-22T16:04:00.002+01:00

by attorney-at-law Martin Arendts, M.B.L.-HSG

The Supreme Court of the Netherlands (Hoge Raad der Nederlanden), the highest Dutch court for civil and criminal cases, referred a case regarding the cross-border offer of sports betting to the European Court of Justice (ECJ) for preliminary ruling. The referral is based on proceedings between the private bookmaker Ladbrokes and the Dutch gambling monopoly operator De Lotto. In 2002 Ladbrokes was restricted from accepting sports bets from Dutch citizens.

The Hoge Raad referred three questions to the ECJ:

• First, the court request to know whether under European law is it allowed to make the offering of gambling attractive through the introduction of new games and through advertising in order to keep (potential) gamblers away from illegal offerings?

• Moreover, the Dutch court asks whether the national judge has to decide in every case whether the application of the national gambling policy (e.g. in this case an order to block a website) is justified in each specific case?

• Finally, the court inquires about the relevance of a license issued in another Member State: Can a Member State, on the basis of a closed licensing system, prevent the offering of gambling via the Internet by an operator who is licensed in another Member State?

Irrespective of this referral, the European Commission has already instigated two infringement proceedings against the Netherlands (IP/06/436 and IP/08/330). In the first proceedings, in which the reasoned opinion of the European Commission has already been served, an action against the Netherlands could now be filed with the ECJ.

By reference of the present case to the ECJ, there will be 16 preliminary ruling proceedings pending (eight of which were referred by German administrative courts relating to the critical factual and legal situation in Germany). Most recently, that is during the current year, the Administrative Court of Schleswig (German Gaming Law updated no. 94), the Regional Court of Porto (German Gaming Law updated no. 100), the County Court of Linz (German Gaming Law updated no. 101) and the Greek Symvoulio tis Epikrateias (German Gaming Law updated no. 103) have referred betting and gambling cases to the ECJ.

from: German Gaming Law updated No. 106

French Council of State refers Zeturf case to ECJ

2008-07-21T13:48:00.001+01:00

Reference for a preliminary ruling from the Conseil d'État (France) lodged on 21 May 2008

(Case C-212/08)

Language of the case: French

Referring court

Conseil d'État

Parties to the main proceedings

Applicant: Société Zeturf Limited

Defendants: Premier ministre, Ministre de l'Agriculture et de la Pêche, Ministre de l'Intérieur, de l'Outre-mer et des Collectivités territoriales, Ministre de l'Économie, de l'Industrie et de l'Emploi - intervening party: G.I.E. Pari Mutuel Urbain (PMU)

Questions referred

Are Articles 49 and 50 of the Treaty establishing the European Community to be interpreted as precluding national legislation which has established a system whereby off-course horserace betting is managed exclusively by a single, non-profit-making operator where, although that system appears to fit the purpose of combating criminality and thus of protecting public order more effectively than would less restrictive measures, it is accompanied by a dynamic commercial policy on the part of the operator, in order to neutralise the risk of unauthorised gambling networks emerging and to channel bettors towards the lawful offer, that does not, in consequence, fully achieve the objective of reducing gambling opportunities?

Is it appropriate, in order to determine whether national legislation such as that in force in France, which has established a system whereby off-course horserace betting is managed exclusively by a single, non-profit-making operator, is contrary to Articles 49 and 50 of the Treaty establishing the European Community, to assess the impairment of freedom to provide services solely from the point of view of the restrictions placed on offering on-line horserace betting, or is it appropriate to take into consideration the entire horserace betting sector in whatever form it is offered and is accessible to bettors?

European Court of Justice to decide on the applicability of Community procurement law on casino licenses

2008-07-21T01:20:00.000+01:00

by attorney-at-law Martin Arendts, M.B.L.-HSG

After the Austrian regional court of Linz’s reference for preliminary ruling regarding the monopoly on casinos (cf. German Gaming Law updated no. 101) other proceedings regarding the licensing procedure for casinos have just recently been referred to the European Court of Justice (ECJ) for preliminary ruling, this time from Greece (Case C-145/08 – „Club Hotel Loutraki“). The reference for preliminary ruling by the Symvoulio tis Epikrateias involves the question whether Community procurement law (here Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts - Procurement Directive) is applicable to the licensing of casinos and the exploitation of such a license.

The questions for preliminary ruling referred by the Greek court sound technical at first, but have considerable practical repercussions. If the Directive relating to the coordination of procedures for the award of public service contracts (Procurement Directive) is applicable, the licenses in question would be subject to an EU-wide tender procedure before being awarded. The ECJ’s decision could challenge the current licensing system for casinos in several Member States, particularly in Germany and Austria.

The first two questions referred by the Greek court relate to the award and the procurement of a casino license. The court wants to know, whether the relevant directives are applicable to such a licensing contract:

• Does a contract by which the contracting authority entrusts to the contracting undertaking the management of a casino business and the execution of a development plan consisting in the upgrading of the casino premises and the commercial exploitation of the possibilities offered by the casino's licence, and which contains a term under which the contracting authority is obliged to pay the contracting undertaking compensation should another casino lawfully operate in the wider area in which the casino in question operates, constitute a concession, not governed by Directive 92/50/EEC?

• If the first question referred for a preliminary ruling is answered in the negative: does a legal action which is brought by persons who have participated in the procedure for the award of a public contract of mixed form providing inter alia for the supply of services subject to Annex I B to Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209), and in which they plead breach of the principle of equal treatment of participants in tender procedures (a principle affirmed by Article 3(2) of that directive), fall within the field of application of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts (OJ 1989 L 395), or is its application precluded inasmuch as, in accordance with Article 9 of Directive 92/50/EEC, only Articles 14 and 16 of the latter apply to the procedure for the award of the abovementioned contract for the supply of services?

Two further questions relate to the procedural situation (filing for remedy, the affected undertakings’ right to set out their views).

Should the ECJ affirm the applicability of the Procurement Directive, the strict rules of Community procurement law would have to be observed. In particular, the Procurement Directive provides for the grounds, on which a tenderer may be excluded and for the assessment of the tenderer’s financial and economic capacity. A third category of provisions is in relation to the tenderer’s technical capacity. The second referred question explicitly bears upon the principle of equal treatment of participants to a tender.

from: German Gaming Law updated No. 103

Discriminatory taxation of gambling winnings: European Commission brings action against Spain

2008-07-20T16:50:00.001+01:00

First action relating to cross-border gambling in the course of pending infringement proceedings

By attorney-at-law Martin Arendts, M.B.L.-HSG

The barriers against the cross-border offering of sports betting and gambling erected by the EU (and EEA) Member States have been under strict scrutiny by the European Commission for several years. The Commission judges numerous national provisions to be in breach of Community law and has therefore already initiated infringement proceedings against several Member States, including Germany (two proceedings, one relating to the sports betting monopoly and one relating to the new Interstate Treaty on Gambling) and Austria. In one of these proceedings, and after preliminary steps to no avail (letter of formal notice by the Commission, statement by the government) the Commission has now filed suit against the Kingdom of Spain with the European Court of Justice (Case C-153/08). So far, the Commission had brought action only against Italy four years ago for procuring horse betting licenses without an invitation to tender and obtained a positive decision of the ECJ (Case C-260/04).

In its statement of claim against Spain, the European Commission invokes discriminatory taxation in breach of Community law. Pursuant to the Spanish tax provisions, winnings from lotteries and betting organised by the Loterías y Apuestas del Estado (the Spanish public-law body in charge of lotteries and betting) or by bodies or entities of the Comunidades Autónomas (Autonomous Communities comparable to the German states) as well as winnings from lotteries organised by the Spanish Red Cross or ONCE (Organización Nacional de Ciegos Españoles, the national association for the Spanish blind persons) are exempt from income tax. However, income from lotteries, games or betting organised by other national bodies or by foreign bodies, including those established in Member States of the EU or the EEA is added to the taxable amount and subject to progressive rates of taxation.

Relying in particular on the relevant ECJ case-law relating to the taxation of games of chance, the Lindman decision (Case C-42/02), as well as the Safir decison (Case C-118/96, concerning the taxation of life insurances), the Commission points out that, according to the settled case-law of the ECJ, the organising of lotteries is to be regarded as a "service" for the purposes of the EC Treaty. Also, according to that case-law, Article 49 EC Treaty prohibits any restriction on the freedom to provide services, or any obstacle to that freedom - even where such a restriction or obstacle applies equally to national providers of services and to those of the other Member States - and precludes the application of any rule of national law the effect of which is to make it more difficult to provide services between Member States than to provide services wholly within a particular Member State. Given the particular features of the gaming sector, the case-law accepts certain restrictions imposed by Member States, provided that such measures can be shown to be appropriate and proportionate, as well as non-discriminatory.

The Commission maintains that the Spanish legislation is discriminatory because entities of other Member States are excluded from the benefit of that tax exemption. Even if the Spanish authorities had shown, in the course of the infringement proceedings, that the legislation at issue is a measure which is appropriate and proportionate to the stated objective of protecting consumers and public order - which they have failed to do - the legislation at issue could not in any circumstances be regarded as compatible with Community law, in so far as it is wholly discriminatory.

Deciding this case, the ECJ will therefore have to clarify the scope of the rule of non-discrimination relating to the cross-border offering of gambling and sports betting services. It is the opinion of most German authorities, for example, that licensing only one operator of games of chance, which is to a significant part owned by the state or a federal state (Land) and completely banning operators from other Member States (via the internet or via receiving offices in Germany) is not discriminatory. However, the scope of the rule of non-discrimination is much broader. The ECJ held any rule of law to be discriminating if it makes it more difficult to provide services between Member States (cross-border) than to provide services wholly within a particular Member State.

After bringing this first action for infringement, one can assume that the European Commission will bring actions against the other Member States involved as well, provided that they cannot clear away the Commission’s objections and shape their national law in conformity with Community law respectively.

from: German Gaming Law updated No. 104

Administrative Court of Berlin once again grants relief from judicial execution to a sports betting agent

2008-07-18T23:54:00.003+01:00

by attorney-at-law Martin Arendts, M.B.L.-HSG

The Administrative Court of Berlin (Verwaltungsgericht Berlin) has once again expressed fundamental constitutional objections against the Interstate Treaty on Gambling (Glücksspiel-Staatsvertrag) and thus granted relief from judicial execution to a sports betting agent (decision of 5 May 2008, case-no. VG 35 A 108.08). The agent, represented by ARENDTS ANWÄLTE (www.gaminglaw.de), may thus continue to transfer sports bets to a private bookmaker, state licensed in Malta, an EU member state.

The Administrative Court thus continues its jurisprudence of now granting relief from judicial execution after the transitional period, set by the Federal Constitutional Court (Bundesverfassungsgericht) in its landmark sports betting decision of 28 March 2006, expired at the end of 2007. In proceedings for amendment (pursuant to sec. 80 par. 7 of the regulations governing administrative courts, VwGO), the court has just recently granted relief from judicial execution against a prohibition order dating back to the year 2007 (decision of 2 April 2008, case-no. VG 35 A 52/08), a decision it refused to render last year.

The new decision pertains to a prohibition order of 6 March 2008, issued on the basis of the new Interstate Treaty on Gambling and the relevant implementation act of the State of Berlin (AG GlüStV). In its decision, the court argues the current diverging jurisprudence very comprehensively and voices severe doubts as to whether the new provisions provided a constitutional authority for the prohibition order. According to the court, the state sports betting monopoly constituted a severe interference with the private sports betting operators’ and agents’ freedom to choose their profession and could probably not be justified. In view of the drastic constitutional objections, there was no need to discuss an infringement of the freedom of establishment and the freedom to provide services, as guaranteed by the EC Treaty, anymore (p. 34).

The exclusion of private sports betting operators constituted a material interference with the freedom to choose one’s profession. According to the doctrine of substantiality the (parliamentary) legislator did not only have to enact a legal basis for the monopoly, but sufficient structural and legal specifications (as demanded by the Federal Constitutional Court in its fundamental sports betting decision of 28 March 2006) as well. The legislator was obliged to enact at least the basic structure as to type and customisation of sports bets. The regulation as demanded by the Federal Constitutional Court must not be left to the executive (p. 10).

Total consistency was now necessary after the expiration of the transitional period (p. 7). Therefore, there was no room for an additional transitional period as provided for by sec. 25 (1) of the Interstate Treaty on Gambling. After the expiration of the transitional period one now had to take a holistic look at the entire gambling sector (p. 32). However, there were only rudimentary substantial criteria as to type and customisation of the sports bets. Moreover it was not apparent that the legislator acted on the distribution of sports bets in accordance with the requirements set forth by the Federal Constitutional Court. Sports bets were continued to be marketed as “an everyday merchandise” (as expressly criticised by the Federal Constitutional Court). In particular the Administrative Court has a critical view on the tight net of receiving offices. In this respect, no re-organisation of this legal and factual structure as criticised by the Federal Constitutional Court was apparent (p. 13).

In addition, there were considerable doubts, whether the requirements for players’ protection were sufficiently respected in adopting and structuring the monopoly. Stake ceiling was not provided for by law (p. 27). Finally, doubts still persisted as to whether financial interests were not continued to be pursued by this re-organisation. After all, fiscal interests were pointed out as being material during the legislative procedure.

The Administrative Court of Berlin does not consider it necessary to mandate conditions in order to grant relief from judicial execution, as recently ordered by the Administrative Court of Kassel (followed by the Administrative Court of Trier) and the Administrative Court of Munich (cf. German Gaming Law updated no. 99 and 100). Specific dangers really emanating from the operator or the agent could be addressed by issuing a prohibition order under trade law (p. 37).

The Administrative Court of Berlin also granted relief with regards to the high administrative fee (EUR 2.000,-). The requirements for charging the fee were not fulfilled. Upon summary examination, the court did not find a case of illegal gambling.

from: German Gaming Law updated No. 102

What is “Gambelli III” going to bring about? – European Court of Justice hears the Liga Portuguesa de Futebol Profissional Case

2008-07-17T23:30:00.000+01:00

by attorney-at-law Martin Arendts, M.B.L.-HSG

After the Gambelli decision at the end of 2003 and its follow-up decision Placanica of March 2007 another landmark decision of the European Court of Justice (ECJ) regarding the freedom to provide services with regard to sports betting will be pronounced at the beginning of next year.

On 29 April 2008, the ECJ’s Grand Chamber, composed of 13 judges, heard Case No. C-42/07, referred from Portugal last year (cf. German Gaming Law updated no. 79 for the questions referred for preliminary ruling).

The ECJ’s upcoming decision should have significant effects not only on Portugal but also on the other EU Member States (in view of the eight pending German preliminary ruling proceedings this should be especially true for Germany). In particular, it remains to be seen, whether the consistency test with regards to national provisions on gambling, put at the centre of the legal discussion by all parties (next to the parties of the main proceedings not less than nine EU Member States as well as the European Commission), is going to experience further specification by the ECJ with regards to the “Gambelli Criteria” as stipulated in the Gambelli and Placanica decisions. Such a “Gambelli III” decision should be of vital importance for the other proceedings pending before the ECJ and should have further legal and political implications.

The subject matter of the initial proceedings is the sponsoring of the Portuguese Football League by bwin, a private bookmaker. Plaintiffs are Liga Portuguesa de Futebol Professional and Baw International Ltd. (a Gibraltar licensed bookmaker and member of the bwin group). Defendant is the Portuguese monopoly provider Santa Casa da Misericórdia de Lisboa. Santa Casa had tried to have that bookmaker’s sponsoring agreement with the Football League (valued at up to EUR 10 mill. over a period of 4 years) declared void. This contract provided for the Football League to be renamed in “Bwin League”. Santa Casa invoked the Portuguese Advertisement Code (Codigo de Publicidade) pursuant to which games of chance were banned from being advertised for, except for such games operated by Santa Casa. The plaintiffs appealed a fine of about EUR 80.000,- imposed on them and invoked prevailing Community law, in particular the freedom to provide services, the freedom of establishment and the principle of free movement of capital.

The oral hearing before the Grand Chamber of the ECJ on 29 April 2008 was above all about the justification of the gambling monopoly. Attorney-at-law Serra Jorge, representing the Football League and the bookmaker, contested that the limitation to one single operator was justified. Providing for a single license was not compatible with fighting crime either, since the Portuguese betting clients would then search illegal alternatives rendering them subject to an increased danger of fraud. A monopoly would drive people into the black market. Serra added, that all EU Member States were fighting money laundering, organised crime and betting fraud. Fighting crime and consumer protection could be accomplished equally effective if not more effective by a well organised licensing system. There were no risks with bookmakers licensed in another member state. Traditionally monopolies were less supervised than private companies.

The Portuguese government representing Santa Case on the other hand argued, that Santa Casa was now able to offer games of chance via the Internet as well (although limited to the games so far offered in receiving offices). Lottery scratch tickets were not offered via the Internet for reasons of gamblers’ protection. A monopoly was justified by limiting the demand for games of chance. Liberalising the gaming sector was a key political question which had to rest with the individual Member State. The free market logic must not force a Member State to abrogate a reliable and proven legal system.

The ECJ asked the parties, whether a national monopoly could be justified for reasons of crime prevention and, whether it was not possible to attain the same goal by other means as well. Moreover, the court asked the parties, whether a monopolized system for one type of game of chance, such as bets for example, could be justified, if a licensing system existed for other types, such as casinos. Furthermore, the ECJ asked for an opinion on whether a provider under a state monopoly should be banned from offering his services beyond the borders of its country of origin.

In addition, the ECJ’s judge-rapporteur, judge Konrad Schiemann, inquired about the notification proceedings regarding the legal regulation of the Internet offer and about the significance of the current ECJ jurisdiction regarding the Swedish monopoly on alcohol (Rosengren decision, Case C-170/04).

One can expect fundamental clarifications from the court as it dealt with the tensions between a state monopoly and the basic freedoms beyond the scope of the questions referred to it. Not only the proceedings before the ECJ but also thousands of proceedings before national courts are about the question, whether one type of game of chance can be monopolised by a state, whereas other, in part clearly more dangerous ones, are allowed to be offered by private operators. Is “coherence light”, that is a systematic regulation restricted to, say sports betting, sufficient or should the regulation of other types of games of chance such as casino games and slot machines be considered as well (a question referred to the ECJ by the Administrative Courts of Giessen, Stuttgart and Schleswig)?

As already reported in German Gaming Law updated no. 100, there is another case, on the basis of a reference for a preliminary ruling regarding the same facts, pending before the ECJ (Santa Casa da Misericórdia de Lisboa v Liga Portuguesa de Futebol Profissional (CA/LPFP), Baw International Ltd und Betandwin.com Interactive Entertainment, Case C-55/08). However, the ECJ has not joined the cases (which would have caused a significant delay) but stayed the later proceedings instead.

The ECJ’s Advocate General in charge of these proceedings, Yves Bot, announced to submit his opinion on 9 September 2008. A decision of the ECJ, usually pronounced within a few months thereafter, is therefore to be expected at the beginning of next year.

from: German Gaming Law updated No. 101

European Court of Justice to decide on a monopoly on casinos – new reference for preliminary ruling from Austria

2008-07-17T23:27:00.000+01:00

by attorney-at-law Martin Arendts, M.B.L.-HSG

After numerous decisions on sports betting the European Court of Justice may now deal with the admissibility of a casino monopoly. The Austrian County Court of Linz (Landesgericht Linz) recently referred several fundamental questions for preliminary ruling to the ECJ (Case no. C-64/08 – „Engelmann“). The ECJ’s decision could well throw into disarray the current licensing system for casinos in Austria and could be of fundamental importance for other Member States as well.

The County Court of Linz referred the following questions for preliminary ruling:

• Is Article 43 EC (Treaty establishing the European Community, in the version of 2 October 1997, most recently amended by the Treaty of 25 April 2005 concerning the accession of the Republic of Bulgaria and Romania to the European Union (OJ 2005 L 157, p. 11)) to be interpreted as precluding a provision which provides that only public limited companies established in the territory of a particular Member State may there operate games of chance in casinos, thereby necessitating the establishment or acquisition of a company limited by shares in that Member State?

• Are Articles 43 EC and 49 EC to be interpreted as precluding a national monopoly on certain types of gaming, such as games of chance in casinos, if there is no consistent and systematic policy whatsoever in the Member State concerned to limit gaming, inasmuch as national licensed organisers encourage participation in gaming - such as public sports betting and lotteries - and advertise such gaming (on television and in newspapers and magazines) in a manner which goes as far as offering a cash payment for a lottery ticket shortly before the lottery draw is made ('TOI TOI TOI - Believe in luck!')?

• Are Articles 43 EC and 49 EC to be interpreted as precluding a provision under which all licenses granting the right to operate games of chance and casinos are issued for a period of 15 years on the basis of a scheme under which Community competitors (not belonging to that Member State) are excluded from the tendering procedure?

The first and the last question referred in particular show that the County Court of Linz regards the current licensing procedure for casinos in Austria to be discriminating and untenable under Community law. It obviously makes reference to the ECJ’s decision concerning the Italian betting licensing system (decision of 13 September 2007, Case C-260/04 – Commission v Italy). A whole new licensing procedure should become necessary, in case that the ECJ will answer in the sense suggested by the County Court of Linz. The second question as to the consistency test can already be found in numerous pending proceedings for preliminary ruling before the ECJ (cf. Arendts, ZfWG (Journal for Betting- and Gaming Law) 2007, 347 ff.).

from: German Gaming Law updated No. 101

EGBA commitment towards higher responsible gaming standards

2008-07-16T00:00:00.002+01:00

The European Gaming and Betting Association (EGBA) today launches a comprehensive set of standards that covers all aspects of player protection, fair gaming and responsible operator behaviour in the online gaming and betting environment. These standards complement stringent legal requirements already imposed by EU licensing jurisdictions.

Over 170 technical requirements have been adopted on a voluntary basis to take into account all aspects of online gaming and betting activities and associated services. As part of their membership criteria, EGBA members are required to comply with all standards. Compliance is verified by a compulsory annual audit carried out by eCOGRA, a leading standards and player protection body, which itself is annually subjected to a comprehensive quality assurance review by one of the world’s leading firms of auditors.

This initiative builds upon EGBA’s (then EBA) code of conduct, which was already adopted in 2003 and follows other industry initiatives. Self-regulation is vital in the online gaming and betting industry in order to continuously take stock of this fast developing eCommerce sector and stay ahead of slower legal developments. It also ensures, given the cross border nature of the sector, consistency of standards across Europe to guarantee consumers can play in a safe, secure and reliable environment.

EGBA Chairman, Norbert Teufelberger said: “These standards are a sign of our commitment to an exemplary level of corporate and social responsibility. They could serve as a basis for reflection at a time when governments and regulators across Europe are trying to find ways to best protect consumers in the online gaming and betting environment.”

These responsible gaming and betting standards include measures such as:

- Promoting responsible gaming, preventing underage gaming and problem gaming;
- A zero tolerance approach to fraud or criminal behaviour;
- Protecting customers’ privacy and safeguarding their information;
- Ensuring prompt and accurate customer payments;
- Assessing rigorously and independently the fairness of games;
- Committing to responsible and ethical marketing practice;

eCOGRA CEO Andrew Beveridge added: "Our goal is to ensure that EGBA has a meaningful professional review process for determining each member's compliance with agreed and consistently applied standards, which consumers and regulators have come to expect in the online gaming and betting industry.”

- ENDS -

About EGBA:

For further information or comment please contact:

Sigrid Ligné: +32 (0) 2 256 7527 or sigrid.ligne@egba.eu

The EGBA is an association of the leading European gaming and betting operators Bet-at-home.com, bwin, Digibet, Carmen Media Group, Expekt, Interwetten, PartyGaming and Unibet. EGBA is a Brussels-based non-profit making association. It promotes the right of private gaming and betting operators that are regulated and licensed in one Member State to a fair market access throughout the European Union. Online gaming and betting is a fast growing market, but will remain for the next decades a negligible part of the overall European gaming market in which the traditional land based offer is expected to grow from € 80 Billion GGR in 2007 to € 95 Billion GGR in 2012, thus keeping the lion’s share with 90,6% of the market. Source: Global Betting and Gaming Consultants, May 2008

www.egba.eu

www.responsiblegamingday.eu

About eCOGRA: eCOGRA sets online standards for gaming and betting and provides an international framework for best operational and player protection practice requirements. These are enforced through inspections and reviews, and continuous monitoring.

Companies that have achieved accreditation with eCOGRA are entitled to bear the organisation's "Safe and Fair" seal, indicating to players everywhere that all operational systems and games are continuously monitored to consistently high standards. For more information; got o www.eCOGRA.org

--------------------------------------------------------------------------------

SUMMARY

EGBA RESPONSIBLE STANDARDS

Objective

The EGBA technical Standards strengthen EGBA’s commitment to offering online gaming and betting activities in a secure, safe and reliable environment. In particular, this initiative aims to:

- preserve customer and stakeholder confidence in the industry;
- ensure that EGBA Members operate in accordance with the best practice and regulatory standards;
- address the perceived areas of concern raised in jurisdictions where a formal regulatory framework does not exist, or where only monopolies operate;
- substantiate commitment and compliance by consenting to rigorous annual independent assessments.

The EGBA technical Standards are founded upon nine principles which focus primarily on consumer protection. Each principle sets a directive from which a number of technical standards are derived. They define socially responsible practices that support the operations and business activities in relation to the products offered by each EGBA member. The members’ commitment is underpinned further by a rigorous independent assessment that is performed annually in order to substantiate compliance.

Summary of key principles and standards

Principle 1: PROMOTE RESPONSIBLE GAMING AND BETTING

- Providing customers with explicit information about the possible risks and harms of online gaming
- Providing a link to qualified sources of help
- Allowing customers to request the setting of betting/deposit limits
- Offering customers the opportunity to self-exclude
- Not providing credit to customers

Principle 2: KNOW-YOUR-CUSTOMER AND PREVENT UNDERAGE GAMING AND BETTING

- Prominently displaying a ‘no under 18’s’ or ‘no under 21’s’ sign on the homepage of the members’ websites, linking to a clear message about underage play
- Advising parents regarding recognised filtering programmes, including a link to a recognised filtering programme to enable customers/parents to prevent minors from accessing gaming and betting sites
- Regularly monitoring underage gaming and betting by conducting random checks of customers to ensure compliance with age restrictions

Principle 3: ZERO TOLERANCE OF FRAUDULENT AND CRIMINAL BEHAVIOUR

- Introducing anti-money laundering policies and procedures to cater for the identification, escalation and reporting of unusual or suspicious activities, including investigating material or unusual deposits, withdrawals and customer accounts where little or no gaming or betting activity takes place
- Logging of all information regarding changes to customer details and requesting appropriate verification documentation for significant changes (e.g. changes to customers’ names and banking details)
- Introducing anti-money laundering practices including the provision of suspicious transaction reports to the relevant national financial investigation unit and international institutions

Principle 4: PROTECT CUSTOMER PRIVACY AND SAFEGUARD INFORMATION

- Protecting confidential customer information from unauthorised or unnecessary disclosure
- Ensuring privacy and confidentiality: customers will be informed on EGBA members’ websites about the exact terms and conditions of the member’s privacy policy

Principle 5: PROMPT AND ACCURATE CUSTOMER PAYMENTS

- Ensuring prompt and accurate processing of payments subject to appropriate and necessary checks and verifications
- Allowing customers to open only one account, by providing the following minimum information: name, age, address, unique username and password.

Principle 6: RIGOROUS INDEPENDENT ASSESSMENT OF PRODUCT FAIRNESS AND RANDOMNESS

Implementing a product testing policy, approved and supported by the EGBA member’s senior management, which will provide for the internal and external testing of all products for fairness and randomness

Principle 7: ETHICAL AND RESPONSIBLE MARKETING

- Ensuring that advertisements shall not entice the underage to bet, and shall not be displayed in media that is clearly targeted at the underage
- Ensuring that advertisements only contain factually correct information and avoid misleading information
- Ensuring that members do not knowingly engage in the distribution of unsolicited advertisements (i.e. SPAM) either directly or through a third party

Principle 8: COMMITMENT TO CUSTOMER SATISFACTION AND SUPPORT

- Giving customers the opportunity to log complaints and disputes on a 24/7 basis
- Ensuring that an independent third party shall be available for mediation or resolution of disputes received from members or their customers

Principle 9: RESPONSIBLE PRACTICES UNDERPINNED BY A SECURE, SAFE AND RELIABLE ENVIRONMENT

- Having a legal operating license from a reputable European regulatory authority
- Having an independent third party assessing on an annual basis the EGBA members’ compliance with the standards
- Having EGBA members commit to an annual audit of financial statements and accounts performed by a reputable external audit firm

Online betting: Can the European Commission enforce the principles of the EU Treaty?

2008-07-13T21:56:00.001+01:00

Whilst a rigorous process within the European Commission (Commission) has been instituted to protect the EC Treaty, questions are now being raised about whether this process is working. Twelve to fifteen months after having received a Reasoned Opinion, the Commission’s final warning before the seizure of the European Court of Justice (ECJ), several Member States have still not taken any concrete legislative measures to amend their gambling laws and put an end to breaches of the EC Treaty. Instead, these States continue to unfairly restrict the free movement of services across the EU, strictly enforcing the domestic laws that are being challenged by the Commission through the infringement proceedings.

Despite having had several recent opportunities to do so, the Commission has failed to take the next step and bring these non-compliant Member States to the ECJ.

The Remote Gambling Association (RGA) and the European Gaming and Betting Association (EGBA) the leading trade associations in Europe, are disappointed by these delays especially after the strong criticism voiced by the European Ombudsman in 2006, confirming that, regardless of political sensitivity, sports betting cases must be dealt in due time by the Commission, including the College of Commissioners.

Additionally, during an exchange of views with Members of the European Parliament on the 27th May 2008 within the Internal Market and Consumer Protection committee, Commissioner McCreevy confirmed his duty to enforce the decisions of the ECJ and to act when he receives a complaint. He also said “I am frustrated with the lethargy in moving forward with these proceedings”.

Clive Hawkswood, Chief Executive of the RGA comments “Gambling has become a real test of the Commission’s ability to resist national protectionist pressures. More generally, it is the functionality and credibility of the Institution as Guardian of the EC Treaty that is at stake.” According to Sigrid Ligné, Secretary General of the EGBA “Well-established and responsible online gaming and betting companies in the EU have had to endure unfair restrictions, discriminations and missed business opportunities for nearly a decade. Each undue delay to bring non-cooperative Member States before the ECJ distorts the internal market, restricts consumer choice and results in incremental costs and damages to many European companies. More than ever, the Commission needs to demonstrate that it can and will enforce the Treaty that it was put in place to protect.”

* * *

For further information or comment please contact:

Clive Hawkswood: +44 20 74 79 40 40 chawkswood@rga.eu.com

Sigrid Ligné: +32 (0) 2 256 7527 sigrid.ligne@egba.eu

The RGA represents the worlds largest licensed, and stock market-listed remote gambling companies and provides the industry with a single voice on all the issues of importance to regulators, legislators, and key decision makers around the world. www.rga.eu.com

The EGBA is an association of the leading European gaming and betting operators. EGBA is a Brussels-based non-profit making association. It promotes the right of private gaming and betting operators that are regulated and licensed in one Member State to a fair market access throughout the European Union. www.egba.eu www.responsiblegamingday.eu

Background on the European Ombudsman’s Special Report:

The European Ombudsman, Nikiforos Diamandouros, published, on 30 May 2006, a special report on Commission's handling of a sports betting complaint. A special report is the strongest possible action the Ombudsman can take. Since the establishment of the European Ombudsman in 1995, the institution has issued only 13 special reports.The report indicated that "the Ombudsman considers that the present case raises an important issue of principle, namely the question as to whether the Commission is entitled indefinitely to delay its handling of complaints alleging an infringement of Community law by a member state on the grounds that it is unable to reach a political consensus on how to proceed". The Ombudsman report stated that the Commission has a duty to deal properly with all infringement complaints, even if they are 'highly politically sensitive or controversial'. He thus recommended the Commission to "deal with the complainant's infringement complaint diligently and without undue delay".

Ladbrokes wins referral of case to ECJ

2008-06-19T19:03:00.001+01:00

Ladbrokes, the world's leading bookmaker, today welcomed the decision of the Dutch Supreme Court to refer its case to the ECJ. The appeal related to an injunction taken out in 2002 that prevents Ladbrokes from accepting sports bets from Dutch citizens on Ladbrokes.com.

The court's decision means that the European law issues which are fundamental to the case, relating to the right under the Treaty of Rome for a well regulated online betting company to offer its services across borders will now be heard by Europe's highest court.

Ladbrokes Managing Director of eGaming John O'Reilly commented: "We have fought for 6 years against Dutch protectionism and finally we have won the referral to the European Court of Justice. At last the Dutch courts have recognised that its laws on betting must be viewed in the context of European law. Under the Treaty of Rome we should be able to provide our services across borders in competition with the Dutch monopoly, but at the moment we are unfairly prevented from doing so."

The Dutch Court has referred the following three questions to the European Court of Justice to guide them on how they should deal with the case in the context of European law.

1. Under European case law (Gambelli etc) is it allowed to make the offering of gambling attractive through the introduction of new games and through publicity in order to keep (potential) gamblers away from illegal offerings?

2. Does the national judge in each case have to decide whether the application of the national policy re gambling (e.g. in this case an order to block a website) in each specific case is justified?

3. Can a member state on the basis of a closed licence system prevent the offering of gambling via the internet by a company who has a licence in another member state?

Ladbrokes has previously complained to the EU Commission about the situation in the Netherlands where it has been restricted from accepting Dutch customers at www.ladbrokes.com despite the fact it does not advertise in the Netherlands or offer a Dutch language service. The Netherlands is one of the countries that may be referred to the ECJ by the EU Commission, which instigated proceedings against the Netherlands in 2006 citing concerns about Dutch laws restricting access to its gambling and sports betting markets.

press release of Ladbrokes

Gaming machines: European Commission brings further action against Greece

2008-06-12T22:48:00.001+01:00

Commission of the European Communities v Hellenic Republic

(Case C-109/08)

Language of the case: Greek

Parties

Applicant: Commission of the European Communities (represented by: Maria Patakia)

Defendant: Hellenic Republic

Form of order sought

declare that, by failing to take the necessary measures to comply with the judgment delivered by the Court of Justice on 26 October 2006 in Case C-65/05, the Hellenic Republic has failed to fulfil its obligations under Articles 28 EC, 43 EC and 49 EC and Article 8 of Directive 98/34/EC; 1

order the Hellenic Republic to pay to the Commission a proposed penalty payment of EUR 31 798.80 for each day of delay in complying with the judgment which was delivered in Case C-65/05, from the day when judgment is delivered in the present case until the day when the judgment delivered in Case C-65/05 has been complied with;

order the Hellenic Republic to pay to the Commission a daily lump sum of EUR 9 636, from the day when judgment was delivered in Case C-65/05 until the date on which judgment is delivered in the present case or, if earlier, the date on which the judgment in Case C-65/05 is complied with;

order the Hellenic Republic to pay the costs.

Pleas in law and main arguments

1. On 26 October 2006 the Court of Justice of the European Communities delivered a judgment in which it declared as follows:

by inserting into Articles 2(1) and 3 of Law No 3037/2002 the prohibition, subject to the criminal and administrative penalties set out in Articles 4 and 5 of the same law, on the installation and operation of all electrical, electromechanical and electronic games, including all computer games, on all public or private premises apart from casinos, the Hellenic Republic had failed to fulfil its obligations under Articles 28 EC, 43 EC and 49 EC and Article 8 of Directive 98/34/CE of the European Parliament and of the Council laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services, as amended by Directive 98/48/EC of the European Parliament and of the Council of 20 July 1998.

2. After calling upon the Hellenic Republic to inform it of any regulatory measures to comply with the Court's judgment, the Commission sent it a letter of formal notice and a reasoned opinion, in accordance with Article 228 EC. The Hellenic Republic replied to neither.

3. Consequently, the Commission recorded that the Hellenic Republic had failed to take the necessary measures to comply with the Court's judgment and decided to bring proceedings against it before the Court in accordance with Article 228 EC.

4. By its action the Commission, first, asks the Court to declare that the Hellenic Republic has not complied with the judgment delivered by the Court on 26 October 2006 in Case C-65/05 and has therefore failed to fulfil its obligations under Articles 28 EC, 43 EC and 49 EC and Article 8 of Directive 98/34/EC and, second, proposes that the Court order the Hellenic Republic to pay to the Commission:

- a penalty payment of EUR 31 798.80 for each day of delay in complying with the judgment which was delivered in Case C-65/05, from the day when judgment is delivered in the present case until the day when the judgment delivered in Case C-65/05 has been complied with;

- a daily lump sum of EUR 9 636, from the day when judgment was delivered in Case C-65/05 until the date on which judgment is delivered in the present case or, if earlier, the date on which the judgment in Case C-65/05 is complied with.

____________

1 - Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations (OJ No L 204, 21.7.1998, p. 37).

Discriminatory taxes on lottery and betting winning: European Commission files suit against Spain

2008-05-29T10:02:00.001Z

Action brought on 15 April 2008 - Commission of the European Communities v Kingdom of Spain

Case C-153/08

Parties

Applicant: Commission of the European Communities (represented by: R. Lyal and L. Lozano Palacios, acting as Agents)

Defendant: Kingdom of Spain

Form of order sought

The applicant claims that the Court should:

declare that, by maintaining in force fiscal legislation taxing winnings from all types of lotteries, games and betting organised outside the Kingdom of Spain, whereas winnings obtained from certain lotteries, games and betting organised within the Kingdom of Spain are exempted from income tax, the Kingdom of Spain has failed to fulfil its obligations under Community law and, in particular, under Article 49 EC and Article 36 of the Agreement on the European Economic Area;

order the Kingdom of Spain to pay the costs.

Pleas in law and main arguments

Under Spanish legislation, winnings from lotteries and betting organised by Loterías y Apuestas del Estado (the Spanish public-law body in charge of lotteries and betting) or by bodies or entities of the Comunidades Autónomas (Autonomous Communities), and winnings from lotteries organised by the Spanish Red Cross or the Organización Nacional de Ciegos Españoles (Spanish national association for the blind) are exempt from income tax. However, income from lotteries, games or betting organised by other national bodies or by foreign bodies, including those established in Member States of the European Union or the European Economic Area, is added to the taxable amount and subject to progressive rates of taxation.

Relying in particular on Lindman and Safir, the Commission points out that, according to that line of authority, the organising of lotteries is to be regarded as a "service" for the purposes of the Treaty. Also according to that case-law, Article 49 EC prohibits any restriction on the freedom to provide services, or any obstacle to that freedom - even where such a restriction or obstacle applies equally to national providers of services and to those of the other Member States - and precludes the application of any rule of national law the effect of which is to make it more difficult to provide services between Member States than to provide services wholly within a particular Member State. Given the particular features of the gaming sector, the case-law accepts certain restrictions imposed by Member States, provided that such measures can be shown to be appropriate and proportionate, as well as non-discriminatory.

The Commission maintains that the Spanish legislation is discriminatory because the exemption is reserved for certain entities which that legislation defines precisely, and entities of other Member States, albeit of the same nature and in pursuit of the same objectives as the Spanish entities specified in the exemption rule, are excluded from the benefit of that exemption. Accordingly, even if the Spanish authorities had shown, in the course of the infringement proceedings, that the legislation at issue is a measure which is appropriate and proportionate to the stated objective of protecting consumers and public order - which they have failed to do - the legislation at issue could not in any circumstances be regarded as compatible with Community law, in so far as it is wholly discriminatory.

New referral to the ECJ: Club Hotel Loutraki

2008-05-29T09:51:00.001Z

Reference for a preliminary ruling from the Simvoulio tis Epikratias (Greece) lodged on 9 April 2008 - Club Hotel Loutraki AE, Athinaïki Tekhniki AE and Evangelos Marinakis v Ethniko Simvoulio Radiotileorasis and Ipourgos Epikratias

Case C-145/08

Referring court

Simvoulio tis Epikratias

Parties to the main proceedings

Claimants: Club Hotel Loutraki AE, Athinaïki Tekhniki AE and Evangelos Marinakis

Defendants: Ethniko Simvoulio Radiotileorasis and Ipourgos Epikratias

Questions referred

Does a contract by which the contracting authority entrusts to the contracting undertaking the management of a casino business and the execution of a development plan consisting in the upgrading of the casino premises and the commercial exploitation of the possibilities offered by the casino's licence, and which contains a term under which the contracting authority is obliged to pay the contracting undertaking compensation should another casino lawfully operate in the wider area in which the casino in question operates, constitute a concession, not governed by Directive 92/50/EEC?

If the first question referred for a preliminary ruling is answered in the negative: does a legal action which is brought by persons who have participated in the procedure for the award of a public contract of mixed form providing inter alia for the supply of services subject to Annex I B to Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209), and in which they plead breach of the principle of equal treatment of participants in tender procedures (a principle affirmed by Article 3(2) of that directive), fall within the field of application of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts (OJ 1989 L 395), or is its application precluded inasmuch as, in accordance with Article 9 of Directive 92/50/EEC, only Articles 14 and 16 of the latter apply to the procedure for the award of the abovementioned contract for the supply of services?

If the second question referred for a preliminary ruling is answered in the affirmative: accepting that a national provision in accordance with which only all the members of a consortium without legal personality which has participated unsuccessfully in a public procurement procedure can bring a legal action against the act awarding the contract, and not consortium members individually, is not in principle contrary to Community law and specifically to Directive 89/665, and that that still applies where the legal action has initially been brought by all the members of the consortium jointly but ultimately proves, as regards some of them, to be inadmissible, is it in addition necessary, from the viewpoint of application of that directive, to examine, in order to make a declaration of inadmissibility, whether those individual members thereafter retain the right to claim before another national court any damages which may be envisaged by a provision of national law?

When it has been held by settled case-law of a national court that an individual member of a consortium may also bring an admissible legal action against an act falling within a public procurement procedure, is it compatible with Directive 89/665/EEC, interpreted in the light of Article 6 of the European Convention on Human Rights as a general principle of Community law, to dismiss a legal action as inadmissible, because of a change to that settled case-law, without the person who has brought that legal action first being given either the opportunity to cure the inadmissibility or, in any event, the opportunity to set out, pursuant to the adversarial principle, his views relating to that issue?

Referral to the ECJ from the Administrative Court of Schleswig

2008-05-13T17:26:00.001Z

Case C-46/08

Language of the case: German

Referring court

Schleswig-Holsteinisches Verwaltungsgericht

Parties to the main proceedings

Applicant: Carmen Media Group Ltd

Defendants: Land Schleswig-Holstein and Minister for the Interior for the Land Schleswig-Holstein

Questions referred

Is Article 49 EC to be interpreted as meaning that reliance on the freedom to provide services requires that a service provider be permitted, in accordance with the provisions of the Member State in which it is established, to provide that service there as well - in the present case, restriction of the Gibraltar gambling licence to 'offshore bookmaking'?

Is Article 49 EC to be interpreted as precluding a national monopoly on the operation of sports betting and lotteries (with more than a low potential risk of addiction), justified primarily on the grounds of combating the risk of gambling addiction, whereas other games of chance, with considerable potential risk of addiction, may be provided in that Member State by private service providers, and the different legal rules for sports betting and lotteries, on the one hand, and other games of chance, on the other, are based on the differing legislative powers of the Bund and the Länder?

If question (2) is answered in the affirmative:

Is Article 49 EC to be interpreted as precluding national rules which make entitlement to the grant of a licence to operate and arrange games of chance subject to the discretion of the competent licensing authority, even where the conditions for the grant of a licence as laid down in the legislation have been fulfilled?

Is Article 49 EC to be interpreted as precluding national rules prohibiting the operation and brokering of public games of chance on the internet, in particular where, at the same time, although only for a transitional period of one year, their online operation and brokering is permitted, subject to legislation protecting minors and players, for the purposes of the principle of proportionality and to enable two commercial gambling brokers who have previously operated exclusively online to switch over to those distribution channels permitted by the Staatsvertrag?

Online betting in tennis: French Tennis Federation sued for damages

2008-05-04T16:19:00.000Z

Following claims by the FFT (Fédération Française de Tennis) that services offered by online sports betting operators present a danger to the ethics of sport, bwin, a member of the European Gaming and Betting Association (EGBA), is suing the French Tennis Federation for damages before a Paris court (Tribunal de grande instance).

Following claims by the FFT (Fédération Française de Tennis) that services offered by online sports betting operators present a danger to the ethics of sport, bwin, a member of the European Gaming and Betting Association (EGBA), is suing the French Tennis Federation for damages before a Paris court (Tribunal de grande instance).

The EGBA is keen to emphasise that the nature of the Internet means that it is an extremely efficient tool in providing operators with a perfect audit trail, one that can, where appropriate, be shared with regulators and other authorities in order to trace bets and hence provide valuable evidence in the fight against fraud in sports.

In contrast to the views of the FFT, any match-fixing would penalise bookmakers severely as they take financial risk when setting odds for all sporting events. As a result, any fraud which attempts to influence the outcome of an event would both distort the odds being offered and almost certainly deprive the the sports betting operator from generating any value from the event.

The EGBA works closely with the European Sports Security Association (ESSA)*. ESSA has set up an early warning system, in close cooperation with relevant sports authorities, such as the Association of Tennis Professionals (ATP), that is designed to combat fraud in connection with sporting events.

This early warning system that connects all ESSA members enables the early detection and analysis of irregular betting patterns. When an irregularity is confirmed, the relevant bets are suspended and the information is then passed on immediately to the relevant sports authorities, so that they can carry out the necessary investigations.

* ESSA, which groups the main online gaming and betting operators, works in partnership with numerous sports authorities such as the ATP (Association of Tennis Professionnals), the WTA (Women’s Tennis Association), the ITF (International Tennis Federation), FIFA (Fédération Internationale de Football Association), UEFA (Union of European Football Association) or l’EPFL (European Professional Football League). http://www.eu-ssa.org/

EGBA press release

FFT claim rejected: Belgians will be able to place online bets with EU operators on Roland Garros and Paris Masters 2008

2008-05-04T16:16:00.001Z

In three rulings issued yesterday in cases brought forward by the French Tennis Federation (FFT) in Belgium against EU licensed operators including EGBA member bwin, the Liège first instance court rejected all allegations of the complainant.

The EGBA welcomes this ruling which confirms that the operators concerned do not violate the FFT’s rights as the event organizers of Roland Garros and Paris Masters. The Belgian players will therefore continue to enjoy this very popular entertainment in 2008.

The judge, taking into consideration the corporate responsibility of the EU operators concerned and the procedures in place “preventing all anonymous bets, ensuring perfect traceability” concluded that these operators had behaved in a prudent and diligent manner. Moreover, the judge took stock of “the various measures, notably for the protection of minors” implemented by bwin, as well as its membership of “ESSA (“European Sport Security Association”) which aims to guarantee the integrity of sports betting offers and to keep sports honest and free from fraud”.

The judge also considered that the “simple mention of the name of a sports event is a necessary indication for the online betting activity” which therefore “cannot be considered as an act of parasitism since its sole purpose is to let the player identify which sport event to place a bet on”.

The Belgian judge ordered the French Tennis Federation to pay € 5000 per case for the recovery of legal costs.

Sigrid Ligné, EGBA Secretary General commented: “EU-licensed bookmakers are professionals that have a high level of expertise, know-how and risk management skills. This has been clearly recognised by the Belgian judge looking at the fact-based evidence to dismiss all the claims in this case.”

EGBA press release

European Court of Justice decides on casino monopoly

2008-05-04T16:08:00.001Z

Referring court
Landesgericht Linz

Party to the main proceedings
Ernst Engelmann

Questions referred:

Is Article 43 EC (Treaty establishing the European Community, in the version of 2 October 1997, most recently amended by the Treaty of 25 April 2005 concerning the accession of the Republic of Bulgaria and Romania to the European Union (OJ 2005 L 157, p. 11)) to be interpreted as precluding a provision which provides that only public limited companies established in the territory of a particular Member State may there operate games of chance in casinos, thereby necessitating the establishment or acquisition of a company limited by shares in that Member State?

Are Articles 43 EC and 49 EC to be interpreted as precluding a national monopoly on certain types of gaming, such as games of chance in casinos, if there is no consistent and systematic policy whatsoever in the Member State concerned to limit gaming, inasmuch as national licensed organisers encourage participation in gaming - such as public sports betting and lotteries - and advertise such gaming (on television and in newspapers and magazines) in a manner which goes as far as offering a cash payment for a lottery ticket shortly before the lottery draw is made ('TOI TOI TOI - Believe in luck!')?

Are Articles 43 EC and 49 EC to be interpreted as precluding a provision under which all licences granting the right to operate games of chance and casinos are issued for a period of 15 years on the basis of a scheme under which Community competitors (not belonging to that Member State) are excluded from the tendering procedure?

Online gaming industry calls for European cooperation in responsible gaming

2008-04-21T12:58:00.000Z

Key stakeholders from across the online gaming industry spoke with one voice at the inaugural ‘Responsible Gaming Day’ event at the European Parliament yesterday, calling on the EU for greater cooperation to ensure a safer and more secure online gaming environment for consumers.

The event, the first of its kind to be hosted at the European Parliament, saw a number of MEPs, the EU Slovenian Presidency, regulators and academics join leading industry representatives to exchange best practices and knowledge in the field of responsible gaming.

Norbert Teufelberger, Chairman of the European Gaming and Betting Association (EGBA) said: “No matter how much we do, no matter how many rules we put into place, and no matter how good we are – no solution will be optimal if it is not inclusive and based on the full cooperation and commitment of all stakeholders.”

Christofer Fjellner, MEP (EPP-DE, Sweden) added, “The key ticket to entering national markets is consumer protection. Using this as an argument to protect monopolies is simply letting consumers down.”

Protection of minors was also a key focus of yesterday’s discussions. Andrew Poole, Managing Director, GamCare commented: “There needs to be shared responsibility to minimise underage gaming. Consistent regulation across jurisdictions and proper education are key in achieving an effective industry-wide response to underage gaming.” This view was echoed by Leon Thomas, Head of Regulatory Compliance at PartyGaming who stated “We want governments to help us help consumers.”

The event also featured academia specialised in gaming and betting behaviour research who emphasised the need to use scientific research rather than conjecture when talking about online problem gaming. Richard LaBrie, Ed. D. Harvard Medical School commented: “The advantage of online gaming is that you can track data in real time rather than relying on self reports, which may lack reliability.”

You can find more details of the event on: www.ResponsibleGamingDay.eu

For further information or comment please contact:

Sigrid Ligné: +32 (0) 2 256 7527

sigrid.ligne@egba.eu

The EGBA is an association of the leading European gaming and betting operators Bet-at-home.com, bwin, Digibet, Carmen Media Group, Expekt, Interwetten, PartyGaming and Unibet. EGBA is a Brussels-based nonprofit making association. It promotes the right of private gaming and betting operators that are regulated and licensed in one Member State to a fair market access throughout the European Union.

www.egba.eu

Administrative Court of Munich once again grants relief from judicial execution of a prohibition order

2008-04-18T17:17:00.001Z

by Attorney-at-Law Martin Arendts, M.B.L.-HSG

The Bavarian Adminstrative Court of Munich (Verwaltungsgericht München) has once again granted relief from judicial execution to a sports betting agent, this time against a prohibition order of the Free State of Bavaria (decision of 7 April 2008, file-no. M 16 08.1128). The agent, represented by ARENDTS ANWÄLTE law firm (www.wettrecht.de), can therefore continue to transfer sports betting wagers to a privately owned bookmaker, licensed in the EU. As already mentioned in German Gaming Law updated no. 99, the Administrative Court of Munich has recently changed its existing line of reasoning and, in view of the outcome in the main issue, which it regards to be open, now grants relief from judicial execution to agents with the nationality of an EU member state.

In the opinion of the Administrative Court of Munich, the main proceedings will have to establish whether the normative standards under the Interstate Treaty on Gambling and its Bavarian implementing laws as well as the measures adopted by the Bavarian State Government complied with the ECJ’s requirements for fundamental rights limiting “gambling policies”. The Administrative Court of Munich enjoined the sports betting agent to file for a license. One could reasonably expect from the sports betting agent – this being sufficient at the same time – to make an effort in order to obtain a license and, if need be, to seek judicial clarification after the proceedings of interference (administrative proceedings reviewing an individual administrative decision upon a protest by the party aggrieved) had ended.

from: German Gaming Law updated No. 100

County Court of Porto refers sponsoring by bwin to the European Court of Justice

2008-04-18T17:13:00.000Z

by Attorney-at-Law Martin Arendts, M.B.L.-HSG

The County Court of Porto (Tribunal Judicial de Comarca do Porto) has referred a Portuguese sports betting case concerning the listed bookmaker bwin to the European Court of Justice (ECJ). The proceedings, there registered as Case C-55/08, are the eleventh proceedings concerning the freedom to provide services with regards to sports betting and other games of chance (where eight proceedings from Germany alone are pending, which of the six proceedings of the Administrative Courts of Stuttgart and Giessen were already joined in the course of the last years; concerning the proceedings pending so far, see Arendts, Zeitschrift für Wett- und Glücksspielrecht (ZfWG) 2007, pages 347 et sq.). In its questions referred to the ECJ, the County Court of Porto, in addition to questions concerning the freedom to provide services also raises questions with regards to Community law rules on competition and the prohibition of state monopolies.

The parties of the initial proceedings are the same as the ones of the proceedings already pending since last year registered as Case C-42/07 (cf. German Gaming Law updated No. 79), but with inverted procedural roles. The plaintiff of the current proceedings is Santa Casa da Misericórdia de Lisboa (SCML). SCML is exclusively entitled to operate lotteries and games of chance similar to lotteries under Portuguese law. The defendants it sued are the Portuguese Football League (Liga Portuguesa de Fuetbol Profissional (CA/LPFP) and two bwin companies (the main company of the group being listed on the stock exchange, the affiliated company sued here holding a Gibraltar license). The matter in dispute is the bookmaker’s sponsoring contract with the Portuguese Football League.

The County Court of Porto referred three questions to the ECJ:

• It wants to have clarified, whether the state monopoly on games of chance and bets under Portuguese law complies with Community law rules, in particular with the freedom to provide services, free competition and the prohibition of state monopolies.

• In a second question the Portuguese court inquires about the criteria for interpreting national provisions restricting these Community law principles. It would like to assess whether such restrictions are admissible in the light of Community law rules.

• Finally, the court inquires whether a ban on advertising games of chance complies with the principles of Community law, in particular with the freedom to provide services, free competition, and the prohibition of monopolies, if there is an exception under which Santa da Misericórdia de Lisboa can advertise the games of chance it organises.

Due to these preliminary questions, the ECJ will be able to comment on the significance of the competition rules of the EC Treaty (Articles 81 et seq. EC Treaty) for the gambling- and betting sector. This could have considerable implications on the German state monopoly. Moreover, the ECJ will also be able to comment on the legal provisions regarding the advertisement of sports betting and games of chance. Millions, which are so far lost to football associations and clubs due to the ban on advertisement for private operators, are at stake. Sponsoring by bwin has already effectuated dozens of lawsuits in Germany as well.

from: German Gaming Law updated No. 100

Administrative Court of Munich grants sports betting agent relief from judicial execution of a prohibition order

2008-04-18T15:24:00.001Z

by Attorney-at-Law Martin Arendts, M.B.L.-HSG

In a new decision, the Bavarian Administrative Court of Munich (Verwaltungsgericht München) granted a sports betting agent relief from judicial execution of a prohibition order issued by the city of Munich (decision of 7 April 2008, file-no. M 16 08.851). The sports betting agent, who’s case was pleaded by ARENDTS ANWÄLTE law firm (www.wettrecht.de), can thus keep operating his business and transferring sports bets to a privately owned and state licensed bookmaker in the EU. The Administrative Court of Munich has thus changed its previous line of reasoning, after having refused to grant relief from judicial execution in similar cases in recent years. The court granted relief subject to the sports betting agent filing for a license under gambling law.

In the court’s opinion, the outcome of the main proceeding can be estimated to be open. The outcome depended significantly upon the question, whether the normative standards under the Interstate Treaty on Gambling and its Bavarian implementing act, as well as the measures adopted by the Bavarian state government complied with the ECJ’s requirements for fundamental rights limiting “gambling policies”. This had to be determined comprehensively during the main proceedings in application of the requirements set forth by the Federal Constitutional Court (Bundesverfassungsgericht) and the European Court of Justice (ECJ). The following criteria were decisive: whether an active prevention policy was provided for the state offer, to which extent advertisement would be placed, how large the distribution channels would be and to which extent sports bets would be made a good of everyday life. One also had to examine, what risk potential was inherent to the individual gambling sectors and whether, pursuant to the ECJ’s jurisdiction, one did not have to find a “comprehensive solution” for the entire gaming sector.

The Administrative Court of Munich enjoined the sports betting agent to file for a license, even if granting of the same could be ruled out under the current Interstate Treaty on Gambling. One could reasonably expect from the sports betting agent –this being sufficient at the same time – to make an effort in order to obtain a license and, if need be, to seek judicial clarification after the proceedings of interference (administrative proceedings reviewing an individual administrative decision upon a protest by the party aggrieved) had ended.

Sports betting: new referral to the European Court of Justice

2008-04-16T21:26:00.001Z

Reference for a preliminary ruling from the Tribunal Judicial da Comarca do Porto (Portugal) lodged on 13 February 2008 -
Santa Casa da Misericórdia de Lisboa v Liga Portuguesa de Fuetbol Profissional (CA/LPFP), Baw International Ltd e Betandwin.Com Interactive Entertainment

(Case C-55/08)

Referring court

Tribunal Judicial da Comarca do Porto (Portugal)

Parties to the main proceedings

Applicant: Santa Casa da Misericórdia de Lisboa

Defendants: Liga Portuguesa de Fuetbol Profissional (CA/LPFP), Baw International Ltd and Betandwin.Com Interactive Entertainment

Questions referred

1. Is the fact that the State reserves to itself the 'right to run games of luck or chance' (Article 9 of DL 422/89 of 2 December, amended by DL 10/95 of 19 January 1995 and by DL 40/2005 of 17 February 2005) and the right to 'organise pool betting systems' (Article 1 of DL 84/85 of 17 December 1985, amended by DL 317/2002) compatible with the rules of Community law ... laying down the principles of the freedom to provide services, free competition and prohibition of State monopolies?

2. What criteria should guide interpretation of national legislation restricting those principles, for the purposes of determining whether such restriction is admissible in light of the rules of Community law ...?

3. Is the prohibition of advertising games of luck and chance when forming the substantive content of the message, having regard to the exception relating to the advertising of games organised by the Santa Casa da Misericórdia de Lisboa, compatible with the rules of Community law ... laying down the principles of the freedom to provide services, free competition and prohibition of State monopolies?

Court of Appeal of Düsseldorf: state lottery- and sports betting monopoly is not justified

2008-03-17T17:19:00.000Z

Court calls for a fair tender procedure for a privately owned gambling operator

by Attorney-at-Law Martin Arendts, M.B.L.-HSG

By decision of 3 March 2008 (file-no. VII-Kart 19/07 (V)) the First Cartel Division of the Court of Appeal of Düsseldorf (Oberlandesgericht Düsseldorf) dismissed the motions of the State of Rhineland-Palatinate (Land Rheinland-Pfalz) and of Lotto Rheinland-Pfalz GmbH against a decision of the German Federal Cartel Office (Bundeskartellamt) to prohibit their merger. In its ratio decidendi the Court of Appeal of Düsseldorf raises fundamental doubts as to the legality of a state monopoly and, referring to the European Commission’s legal opinion on this matter, calls for a tender of the license so far granted to Lotto Rheinland-Pfalz GmbH.

By filing motions with the Court of Appeal, the state and the lottery company intended to obtain a decision, allowing for the state to take over the controlling majority of the lottery company, contrary to the Federal Cartel Office’s decision. The Federal Cartel Office had prohibited the State of Rhineland-Palatinate to acquire a majority interest of 51% in November 2007. Doing so, in its press release of 29 November 2007, the Federal Cartel Office emphasised that even highly regulated sectors such as the gambling industry were not “competition free zones”. Anti-trust law was applicable to them without any restriction.

Lotto Rheinland-Pfalz GmbH is the only lottery company in Germany not owned or controlled by the state. The shareholders of this GmbH (equivalent of a Ltd.) keep being the three sports federations of Rhineland-Palatinate (Sportbund Pfalz e.V., Sportbund Rheinhessen e.V. and Sportbund Rheinland e.V.). However, they were willing to cede a majority interest in return for an adequate guarantee by the state.

The Federal Cartel Office voiced considerable anti-trust related doubts regarding this nationalisation. With its lottery products “Zahlenlotto”, “Spiel 77”, “Super 6”, “Keno” and “Glücksspirale”, which are sold over more than 1200 lottery counters, Lotto Rheinland-Pfalz GmbH disposes of a dominant market position. The State of Rhineland-Palatinate’s planned majority interest would even increase this dominant position. The merger would lead to a “structural alliance” between Lotto Rheinland-Pfalz GmbH and Süddeutsche Klassenlotterie (a lottery operated by several German states), which would have largely eliminated the competition existing so far.

In its decision, the Court of Appeal of Düsseldorf considers the motions to be inadmissible already. Subsequently the court issues fundamental explanations as to the legitimacy of a state monopoly. According to the jurisprudence of the German Federal Constitutional Court and the ECJ a state lottery- and betting monopoly was only legitimate “in order and only as far as necessary to attain legitimate goals of common welfare”. The Court of Appeal doubts this with regards to the argument of fighting gambling addiction, which keeps being pleaded as justification:

“Fighting gaming- and betting addiction as well as effective consumer protection can (especially) be achieved by setting respective legal requirements and standards for the gambling business, and by adapted requirements for license holders as well as by a consequent supervision of the gambling operations. It is not necessary, that, additionally, the State of Rhineland-Palatinate has a majority interest in the operations entrusted with the lottery business and to exert dominant influence on the operation by means of its position as a shareholder.”

In the court’s opinion, a monopoly does therefore not stand up to the examination of its commensurability, since there are milder (and equally effective) means to combat gambling addiction and to ensure consumer protection.

The rule of non-discrimination does not necessitate this merger either. The state can have its gambling business operated by a private third party company. However, a tender was required to do so:

“However, it is necessary that the rule of non-discrimination is complied with and that a discrimination free tender procedure takes place accordingly. Should – as the European Commission seems to assume – the Lotto GmbH have been entrusted with the lottery business without invitation to tender, the private lottery undertaking will have to be determined in a transparent and fair competitive bidding in the future.“

The Court of Appeal granted leave to file a special appeal (Rechtsbeschwerde) with the Federal Court of Justice (Bundesgerichtshof). It can be assumed that the Federal Court of Justice will soon have to decide on the ban of this merger as well.

German Federal Court of Justice dismisses motion against enforcement order from bwin International Ltd. – Final ruling on the merits expected in 2009

2008-03-17T11:49:00.000Z

Since 2002, bwin International Ltd. has been providing games of chance to its customers under the www.bwin.com domain (formerly www.betandwin.com) – among others to German residents. In September 2004, Westdeutsche Lotterie GmbH & Co OHG ("Westlotto") sought a judgement against bwin International Ltd. to prevent the Company from organizing, brokering or advertising sports betting, casino and lottery games in Germany.

In February 2006 the Regional Court of Cologne ruled in favour of Westlotto at the first instance. In September 2007, the Higher Regional Court of Cologne confirmed the judgement of the court of first instance, declaring it to be enforceable. bwin lodged an appeal with the Federal Court of Justice against the judgement by the Higher Regional Court of Cologne. Although the Federal Court of Justice is not expected to pass a final ruling on the merits for the next 12 to 18 months, Westlotto instituted enforcement proceedings against bwin in November 2007.

bwin filed a motion to the Federal Court of Justice requesting the court to suspend enforcement proceedings until the court has passed a final ruling on the merits. In a decision served on 14 March 2008, the Federal Court of Justice rejected the motion filed by bwin International Ltd. on procedural grounds. Until a final ruling by the Federal Court of Justice on the merits, Westlotto may now apply for further enforcement orders. If the Company eventually fails to win the appeal proceedings before the Federal Court of Justice, or if a political solution is not found in the interim, any penalties that may be imposed as a result of enforcement orders could have a material adverse effect on the Company’s results and financial position. Should the Federal Court of Justice decide in favour of bwin, the Company reserves the right to claim for damages.

In view of the latest legal developments, bwin and its legal advisors are confident that they will win the case against Westlotto. The European Commission is also of the opinion that the current legal situation in Germany is incompatible with primary EU legislation, and has therefore instituted further infringement proceedings against Germany. Furthermore, there are several preliminary rulings originating from German courts still pending judgement by the European Court of Justice. bwin therefore assumes that it will be able to maintain unchanged the products offered for German clients on the www.bwin.com domain, notwithstanding this judgement by the Federal Court of Justice.

bwin e.K., which offers the Company's products on www.bwin.de under a licence issued by the former German Democratic Republic, is not a party to these proceedings before the Federal Court of Justice.

ad hoc release of 17 March 2007

bwin - publication of preliminary figures for financial year 2007

2008-03-14T16:10:00.000Z

On Thursday, 20 March 2008, bwin will publish selected key figures giving a preview of the preliminary results of the financial year 2007.

The bwin Group has over 13 million registered customers (including 8 million "play money" customers) in over 20 core target markets and operates platforms for sports betting, poker, casino games, soft- and skill games. Under various licences (e.g. in Germany, Italy and Gibraltar), it also offers audio and video streaming of major sporting events (such as matches of the German Soccer League) through subsidiaries and associated companies. The parent Company, bwin Interactive Entertainment AG, has been listed on the Vienna Stock Exchange since March 2000 (ID code "BWIN", Reuters ID code "BWIN.VI"). All details about the company can be found on its investor relations website at www.bwin.ag.

EGBA: European Commission opposes payment blocking in France

2008-03-07T01:31:00.000Z

The European Gaming and Betting Association (EGBA) welcomes the European Commission’s detailed opinion against the French draft decree on gaming payments. The draft intends to oblige French financial institutions to block payment orders from online gaming operators listed by the French authorities, even those that are fully licensed, regulated and based in the EU.

Sigrid Ligné, EGBA Secretary General said: “Today’s action consolidates the Commission’s position that unjustified payment blocking in our sector clearly contravenes EU law. We welcome the Commission’s action and hope that this will send a clear signal to other EU and EFTA Member States that such proposals will not be tolerated”.

The French draft decree is the second of two decrees, drafted under the 2007 Delinquency Act, which attempt to erect technical barriers to further protect the French gambling monopolies that are already the subject of separate EU infringement proceedings. The first draft decree, notified in April 2007, sought to oblige Internet Service Providers to discourage consumers from accessing websites others than those operated by the French gaming monopolies: Francaise des Jeux and PMU.

That draft decree was never adopted following a detailed opinion issued by the European Commission last July. Today’s decision is a timely reminder that restrictions on the free movement of capital and payments, as set out in Article 56 of the EC Treaty, are not acceptable. Similar restrictions are currently being considered in Germany, Norway and the Netherlands; they are already in place in the United States. As demonstrated in the U.S experience “such restrictions are difficult to implement, easy to circumvent, inefficient and foster the growth of an underground market” added Sigrid Ligné.

Today’s Commission detailed opinion extends the standstill period of non-adoption until 31 March 2008, during which time France cannot adopt its draft decree. If France then decides to adopt the text despite the Commission warnings, the Commission can immediately launch infringement proceedings.

European Commission opposes payment blocking in France

2008-03-03T22:34:00.001Z

European Commission requests the Netherlands and Greece to remove national gaming restrictions

2008-03-03T22:32:00.001Z

The European Gaming & Betting Association (EGBA) welcomes today’s decision by the European Commission to pursue infringement proceedings against the Netherlands and Greece and to formally request them to remove gaming restrictions which were found inconsistent with EU law. The Commission took the first step in the infringement procedure against the Netherlands and Greece in March 2006 and June 2007 respectively by issuing a letter of formal notice.

Today’s decisions confirm both countries’ failure to justify the compatibility of their legislation with EC law. Sigrid Ligné, Secretary General of the EGBA commented: “Today’s reasoned opinions send a clear signal that national gaming legislation, which does not serve any genuine consumer protection or public order interest, has no future. Leading European online operators are now calling on Greece and the Netherlands to implement sustainable reforms that will guarantee a fair, open and regulated market access”.

The Netherland’s reasoned opinion coincides with the Dutch government’s plans to issue a three-year exclusive online gaming license to state operator Holland Casino and to force financial institutions to refuse payment transactions to/from EU licensed online gaming and betting operators. “These latest developments make the Commission’s reasoned opinion even more relevant and highlight the need for market protectionist measures to end”, added Sigrid Ligné.

The reasoned opinion against Greece relates to the gaming monopoly granted to OPAP, a publicly listed company which has over the years continued to maximise its profits, expanding its activities beyond the Greek borders while preventing EU operators from gaining fair access to its market. “These particular features of the Greek gaming monopoly and the clear discriminations against EU regulated competitors, left the Commission with no choice but to ensure the respect of basic EU market principles” says Sigrid Ligné.

EGBA, press release of 28 February 2008

Football club VfB Stuttgart files suit against German Interstate Treaty on Gambling

2008-02-13T22:41:00.004Z

by Martin Arendts

The president of VfB Stuttgart, Erwin Staudt, announced in a press conference in Frankfurt today that the football club had filed suit against the new Interstate Treaty on Gambling. The League Association (Ligaverband) of the German Bundesliga supported this move. Staudt argued for asking the Administrative Court of Stuttgart for protection: "We are convinced that the Interstate Treaty on Gambling is unconstitutional and not in conformity with EU law."

Dr. Reinhard Rauball, president of the German Bundesliga, added: "The monopoly on sports betting is a significant disadvantage for the German professional football in the international competition." Football clubs in other EU member states, like Spain, Italy and Austria, could advertise for private bookmakers. German football clubs would loose revenues of 100 to 300 m Euros each year. Due to the state monopoly, VfB was prohibited to advertise bwin, a listed bookmaker. Also Werder Bremen and 1860 München lost bwin as a football shirt sponsor.

Therefore, Rauball argued in favour of a liberalised market system. All parties concerned should discuss a prospective market model.

Deutscher Lotto- und Totoblock confirms plans to start European super lottery

2008-02-11T10:30:00.001Z

A speaker of Deutscher Lotto- und Totoblock, Klaus Sattler, confirmed a report by Bild, the biggest German tabloid, about plans to start the largest European lottery ever. Sattler confirmed this weekend: "It is true that several European lottery operators are considering to start a jackpot oriented game." Bild reported that EuroLotto would offer jackpots of much more than 100 million Euros.

According to Sattler, these plans will be discussed with the supervisory authorities of the states and the Academic Advisory Board (wissenschaftlicher Fachbeirat), established by the new Interstate Treaty on Gambling (Glücksspielstaatsvertrag).

EuroLotto: new super lottery in Germany?

2008-02-10T04:03:00.000Z

by Martin Arendts

According to Bild, the biggest German newspaper, the German state gaming operators want to refresh old plans to start a super lottery with jackpots of a least 10 million Euros and with a chance to win more than 100 million Euros. The plans disappeard, while the new Interstate Treaty on Gambling was discussed, but now seem to be retracked very seriously after the Treaty was signed into law. According to the newspaper article, the state operators want to file applications with the gaming authorities in April and hope to start the new lottery in autumn.

The new lottery will probably cost 2 Euros, significantly more than the normal lottery (0,75 Euro). Lottery drawings will be on Fridays, based on a 5 out of 50 system (and two more numbers out of eight).

EuroLotto would be a direct competitor of EuroMillions, offered since 2004 in nine European states (France, Spain, UK, Belgium, Luxembourg, Portugal, Ireland, Austria, as well as the non-EU member state Switzerland). According to Bild, EuroLotto will also be offered in nine states. Last year, the Scandinavian states, Estonia, the Netherlands and Italy were mentioned as possible partners of the German operators.

European Court of Justice to rule on the conformity of gambling monopoly with EU law

2008-02-07T01:20:00.000Z

Administrative Court of Schleswig publishes questions submitted to the ECJ for preliminary ruling

by Attorney-at-Law Martin Arendts, M.B.L.-HSG

As already reported in German Gaming Law updated no. 93, the Administrative Court of Schleswig (Schleswig-Holsteinisches Verwaltungsgericht) raised considerable doubts as to the conformity of the new Interstate Treaty on Gambling (Glücksspielstaatsvertrag) with EU law and referred a case regarding the state monopoly on sports betting and gambling to the European Court of Justice (ECJ). The 19 page reference for a preliminary ruling, including the four questions submitted to the ECJ, was recently published (decision of 30 January 2008, file no. 12 A 102/06).

An interesting aspect is that this reference – unlike the other seven German references for a preliminary ruling submitted by the Administrative Courts of Cologne, Giessen, and Stuttgart – not only calls for the interpretation of the extent of the freedom to provide services, as provided for by Art. 49 EC Treaty, with regards to the monopoly on sports betting but with regards to lotteries as well.

Like the other German courts which referred cases to the ECJ, the Administrative Court of Schleswig argues that fighting compulsive gambling invoked as justification for the state monopoly is manifestly unsustainable. Other games of chance having higher or equal addiction potential (especially slot machine games - according to the Administrative Court of Schleswig those having the highest addiction potential - as well as horse-betting) can nonetheless be offered by private operators. In addition, state authorities expanded casino games despite their increased addiction potential.

The Administrative Court of Schleswig argued that the entire gambling legislation needed to aim at limiting gambling for a state monopoly to be justified. The argument of state monopoly advocates that there were different sectors of gambling (also embraced by the Administrative Court of Appeal of Hamburg) is clearly rejected by the Administrative Court of Schleswig. Rather one had to take a holistic view at the legislation as a whole:

“Regarding the question of a coherent and systematic limitation of gambling, the court is therefore not capable to find that the ECJ’s requirements for enacting a valid limitation were complied with. A holistic view of all licensed and permitted offers of games of chance is obviously non-existent. Only such a holistic view can enable the legislator called upon to comprise the perceived dangers of gaming- and gambling addiction for the individual and society and to provide the necessary remedies.”

Federal particularities regarding legislative authority could not justify a gaming monopoly limited to a single sector.

* * *

The questions submitted to the ECJ

The Administrative Court of Schleswig requested the ECJ to give a ruling on the following question by way of preliminary rulings proceedings (Article 234 EC Treaty):

a) Is Article 49 EC Treaty to be interpreted to the effect that – invocation of the freedom to provides services implied – the provider of the services needs to have permission to provide the services in the country of establishment – here: limitation of the gambling license of Gibraltar to “offshore bookmaking”?

b) Is Article 49 EC Treaty to be interpreted to the effect that it conflicts with a national state monopoly on the operation of sports betting and lotteries (with more than minor addiction potential) justified by the need to fight compulsive gaming, if other games of chance with considerable addiction potential may be offered by private service providers and the different statutory regulations regarding sports betting and lotteries on the one hand and other games of chance on the other hand are based on the diverging legislative authority of the federation and the states?

In case question b) is answered in the affirmative:

c) Is Article 49 EC Treaty to be interpreted to the effect that it conflicts with a national regulation that leaves the granting of a license for the operation and the transfer of games of chance to the licensing authority’s discretion even in case that the statutory requirements for granting such a license are fulfilled?

d) Is Article 49 EC Treaty to be interpreted to the effect that it conflicts with a national regulation that prohibits the operation and the transfer of public games of chance via the Internet, in particular, if – although limited to a transition period of one year – the operation and the transfer via the Internet complying with youth- and gambler protection provisions is permitted in order to observe the principle of proportionality and to allow two commercial gaming agents, who had been operating via Internet so far, to adapt to the distribution channels to be permitted by the Interstate Treaty?

German Gaming Law updated No. 94

Free movement of services: Commission inquires into restrictions on gambling services in Germany

2008-01-31T15:14:00.000Z

IP/08/119
Brussels, 31 January 2008

The European Commission has decided to send to Germany an official request for information on national legislation restricting the supply of gambling services. The Commission wishes to verify whether the measures in question are compatible with Articles 43, 49 and 56 of the EC Treaty. This decision relates only to the compatibility of the national measures in question with existing EU law. It does not have any implications for the liberalisation of the market for gambling services generally, or for the entitlement of Member States to seek to protect the general interest, so long as this is done in a manner consistent with EU law i.e. that any measures are necessary, proportionate and non-discriminatory. The letter of formal notice is the first step in an infringement procedure under Article 226 of the EC Treaty. Germany has two months in which to respond. The Commission hopes that the answers it receives will lead to an early and satisfactory resolution of the matter.

This new inquiry focuses on a number of provisions of the new legislation which entered into force on 1.1.2008. Some of the key restrictions that are questioned in terms of their compatibility with the EC Treaty's Internal Market provisions are as follows: the total prohibition of games of chance on the Internet; notably sports betting, on which the Commission sent to Germany in March 2007 a detailed opinion; advertising restrictions on TV, on the Internet or on jerseys or billboards; and the prohibition on financial institutions to process and execute payments relating to unauthorised games of chance. In addition, questions are raised regarding the authorisation regime to be granted to intermediaries as well as the criminal sanctions or administrative fines provided for in cases of organisation, advertising and participation in on-line games of chance.

However, it should be noted that in Germany horse race betting on the Internet is not prohibited and slot machines have been widely expanded. Moreover, advertising of games of chance by mail, in the press and on radio is still permitted.

The European Court of Justice has previously stated that any restrictions which seek to protect general interest objectives, such as the protection of consumers, must be "consistent and systematic" in how they seek to limit activities. A Member State cannot invoke the need to restrict its citizens' access to these services if at the same time it encourages them to participate in State games of chance.

The Commission decision to inquire into the compatibility of the measures in question is based on complaints made by a number of service providers and on information gathered by Commission staff.
The latest information on infringement proceedings concerning all Member States can be found at:
http://ec.europa.eu/community_law/index_en.htm

EGBA welcomes European Commission’s decision to launch two further infringement proceedings against Germany and Sweden

2008-01-31T13:55:00.001Z

Online gaming and betting association commends landmark infringement procedure against the Swedish online poker monopoly and decisive action against the German Interstate Treaty

The European Gaming and Betting Association (EGBA) commends the European Commission’s decisive action against the German Interstate Treaty on Gaming at today’s Commissioner Meeting in Brussels. The Commission has taken a clear position against the newly adopted Treaty by issuing a letter of formal notice which is the first step in EU infringement procedures. Furthermore, the Commission has also addressed a letter of formal notice to Sweden with regard to “all national measures relating to poker games and tournaments”.

The German Interstate Treaty, which seeks to ban all online gaming and betting (except for horse racing) in the country, came into force on 1 January 2008 despite formal objections raised by the European Commission under its notification procedure (Directive 98/34/EC) that the Treaty transgressed EU law. This is the first time that the Commission addresses a national gambling legislation not only on the basis of the Freedom to provide services (article 49 of the EC Treaty), but also on the basis of the Freedom of establishment (article 43) and the Free movement of capital and payment (article 56). In particular, the Commission challenges “the total prohibition of games of chance on the Internet; notably sports betting; …advertising restrictions on TV, on the Internet or on jerseys or billboards; and the prohibition on financial institutions to process and execute payments relating to unauthorised games of chance. In addition questions are raised regarding the authorisation regime to be granted to intermediaries as well as the criminal sanctions or administrative fines provided for in cases of organisation, advertising and participation in on-line games of chance.”

EGBA Secretary General Sigrid Ligné commented “By commencing these broad proceedings only thirty days after the Treaty entered into force, the Commision shows its determination to fight restrictions and in particular prohibitions, which are not backed by genuine consumer protection or public order interests. What happened in the US proved that prohibition cannot be the answer. Trustworthy and highly transparent online gaming companies abandoned the US market, thus paving the way for a grey market in which no guidelines whatsoever exist in terms of consumer protection, prevention of compulsive gaming and protection of minors”. EGBA lodged a formal EU complaint against the new German legislation early January alerting the Commission not only on the inefficiency of the prohibition but also on its adverse effects.

The Commission’s action against the Swedish poker monopoly operated by ‘Svenska Spel’ is the first EU infringement action involving online poker. Since March 2006, Sweden has been expanding its monopoly by operating online poker services, while preventing EU-licensed operators from offering their online poker services in the country. This is also the second proceeding opened against Sweden’s protectionist gaming legislation. A first procedure focusing on sports betting restrictions was launched in 2006. The next step in this infringement proceeding would be the referral to the European Court of Justice.

Today’s action against Sweden demonstrates that the Commission’s competence to scrutinise the Member States’ compliance with EU law is not limited to sports betting. National rules related to cross-border poker services are also expected to meet EU requirements and be consistent with a global national gaming policy.

Sigrid Ligné, Secretary General of the EGBA added: “This decision is an important development for EU-licensed operators as it confirms the support of the Commission to guarantee our members’ right to a fair market access both for sports betting and poker services. This decisive action against the German Interstate Treaty and Swedish poker monopoly sends a clear message to all EU countries maintaining or instigating antiquated protectionist gaming regulations. We applaud the commencement of infringement procedures and encourage the Commission to extend these proceedings against other countries that are also contravening EU law”.

Administrative Court of Schleswig refers German Interstate Treaty to the European Court of Justice

2008-01-31T13:52:00.000Z

Court questions justification of the state monopoly regarding sports betting and lotteries

by Attorney-at-Law Martin Arendts, M.B.L.-HSG

The Administrative Court of Schleswig (Schleswig-Holsteinisches Verwaltungsgericht) has raised serious doubts about the justification of the new Interstate Treaty on Gambling (Glücksspielstaatsvertrag) and referred a dispute about the state monopoly regarding sports betting to the European Court of Justice (decision of 30 January 2008, file no. 12 A 102/06). Plaintiff in the main proceeding is a remote gaming operator, licensed in Gibraltar. The gaming operator which wants to offer its services cross-border also in the State of Schleswig-Holstein, filed an application. This application was rejected by the state, citing the monopoly for sports betting and gambling. The gaming operator relied on the freedom to provide services, as guaranteed by the EC Treaty, and filed suit in 2006.

The Administrative Court raised doubts whether the prevention of compulsive gambling and the protection of minors, which were put forward as a justification of the Interstate Treaty, really justify the exclusion of private operators. Other forms of gambling, e. g. gambling machines, are not restricted in the same way. Under EU law, this inconsistent regulation is problematic.

After the seven already pending preliminary proceedings brought by the Administrative Courts of Cologne, Giessen and Stuttgart, the Administrative Court of Schleswig is the fourth German court to refer a sports betting case to the ECJ. As reported, the ECJ has joined the six cases from Giessen and Stuttgart. The new proceeding from Schleswig expressly refers to the new legal situation according to the Interstate Treaty, which became effective as of 1 January 2008, and the still incoherent and inconsistent regulation of gambling in Germany.

Multi-Channel Gambling 2008

2008-01-30T17:09:00.000Z

New sales channels for the fast growing gambling industry

From February 25th to 26th Everest Conference holds the two day conference „Multi-Channel Gambling 2008“, taking place in Berlin, Hotel Concorde. Representatives of leading companies will share their experience and knowledge. In outstanding case studies they will present how they expand their gambling services across digital sales channels such as the internet, iTV and connected mobile devices to attract new customers. Participants of the “Multi-Channel Gambling 2008” conference have the opportunity to find the decisive competitive advantages in the upcoming multi-channel gambling world.

The future of gambling is digital

The internet is well accepted as a new distribution channel by players worldwide and internet gambling has become a fast growing industry. But poker, sports betting and casino can’t just be played over the internet. It can be transferred to other digital means as well. Mobile gambling via mobile phone or palm and by interactive television is the future. UK and France are the European leaders for iTV gambling and the industry is growing steadily. Mobility and TV offer the opportunity to reach the mass market. According to a study of Juniper Research mobile gambling will be a 19 Billion US$ business by 2009, what represents about one third of the total turnover of mobile services.

Find the decisive competitive advantages in the upcoming multi-channel gambling world

To withstand the competition in an unsteady gambling market operators have to find new ways to reach their target groups. Digital distribution channels offer great potential of growth and advantages in the fight for customers. The conference will highlight the recent mobile, online and interactive developments within the European gambling industry.

For more information please contact:
Jürgen Zwerger ,
Managing Director
Everest Conference GmbH
Niederlassung Berlin
Hackescher Markt 4 | 10178 Berlin
Tel.: + 49 (0) 30 32 59 51 402
Fax: + 49 (0) 30 32 59 51 100
j.zwerger@everest-conference.com

EGBA welcomes decision by French criminal court

2008-01-30T17:03:00.000Z

The Court of Appeal of Versailles today called into question the compatibility of French gaming legislation with EU law: The burden of proof now lies with the French authorities to justify their regulatory framework is consistent, proportionate and justified.

Today’s decision follows the request of Didier Dewyn, ex-CEO of Mr Bookmaker, a gaming company licensed in Malta, to annul criminal proceedings brought against him on 16 April 2007 for allegedly organising “illicit lottery” and “clandestine betting on horse races”.

The Court of Appeal of Versailles requested additional information to allow itself to ascertain whether the criteria used under the ECJ’s case law are respected by the French gaming system. The Court considered that referring a question for a preliminary ruling to the ECJ was also not necessary as EC law was clear enough.

EGBA welcomes the decision of the Court of Appeal of Versailles, which relies on the consistent jurisprudence of the ECJ and in particular the Placanica ruling of 6 March 2007. This decision is in line with the ruling of the Cour de Cassation, France’s Supreme Court, in the Zeturf case of 10 July 2007, with which it is fully in line. The French Supreme Court quashed a decision of the Court of Appeal which condemned private operator Zeturf in proceedings brought by the PMU.

Sigrid Ligné, Secretary General of the EGBA comments: “We are delighted with this decision. It is an important one and comes in the general context of the commitment taken by the French authorities to propose a controlled opening of the French gaming market by March 2008.”

press release of EGBA, 18 January 2008

Administrative Court of Schleswig refers sports betting case to the European Court of Justice

2008-01-30T16:17:00.001Z

by Martin Arendts

The Administrative Court of Schleswig (Schleswig-Holsteinisches Verwaltungsgericht) has referred a sports betting case to the European Court of Justice (ECJ). Plaintiff in the main proceeding (file no. 12 A 102/06) is a remote gaming operator, licensed in Gibraltar. The gaming operator which wants to offer its services also in the State of Schleswig-Holstein, filed an application. This application was rejected by the state, citing the monopoly for sports betting and gambling. The gaming operator relied on the freedom to provide services, as guaranteed by the EC Treaty.

After the seven preliminary proceedings brought by the Administrative Courts of Cologne, Giessen and Stuttgart, the Administrative Court of Schleswig ist the fourth German court to refer a sports betting case to the ECJ. As reported, the ECJ has joined the six cases from Giessen and Stuttgart.

EU moves toward ruling on German gambling law

2008-01-18T13:03:00.000Z

According to an article in the newspaper International Herald Tribune, the European Commission plans to decide within weeks whether to step up legal action against Germany over that country's recent move to ban online gambling. The German law came into effect on Jan. 1, banning Web-based betting, with the exception of wagers on horseracing, and restricting other forms of gambling to state-run operators.

The European Gaming & Betting Association urged the commission to take action against the German legislation, saying it violated EU rules. "The prohibitions in the law are very strict and drastic," said Sigrid Ligné, secretary general of the association. "We have a strong feeling that it is incompatible with EU law and that the commission will act on our complaint."

Oliver Drewes, a spokesman for the EU internal markets commissioner, Charlie McCreevy, said that the commission would decide, perhaps by the end of the month, whether to take such action. The commission already warned Germany last year that it thought the law ran counter to EU regulations. The next step, Drewes said, would be a "reasoned opinion" detailing the commission's objections; Germany would then have two months to respond. Then the commission could take the matter to the European Court of Justice.

Under EU law, governments are allowed to legislate against gambling if, for instance, they are concerned about addiction. But McCreevy has objected to what the commission sees as efforts to protect lucrative state-owned gambling providers from private-sector competition. "The commission does not believe this piece of legislation is in line with community law," Drewes said.

German Interstate Treaty: EGBA logdes complaint with European Commission

2008-01-18T12:46:00.000Z

The European Gaming and Betting Association (EGBA) calls on the European Commission to take swift action against the German Interstate Treaty on gaming. The Treaty, which came into force on January 1st and introduces a ban for online gaming and betting (except for horse races) in Germany, is in direct contravention of European Union law. The provisions of the Treaty severely restrict the rights of EGBA’s members to provide services under Article 49 of the Treaty of Rome.

The German Interstate Treaty has come into force despite formal objections raised by the European Commission under its notification procedure (Directive 98/34/EC) that the Treaty transgressed EU law. Its adoption shall not only restrict the activities of EU operators but directly challenges the Commission’s clear position under the notification procedure itself.

Norbert Teufelberger, Chairman of the EGBA, commented: “Prohibition is not and has never been a solution, be it in our sector or other sectors. It is not a responsible approach and cannot be a substitute to an efficient gaming policy. Focusing on online gaming does not make sense when most recent peer reviewed studies show that although online and offline gaming has a different target audience, players’ behaviour is similar whether online or offline! Furthermore, in a regulated environment online gaming allows for higher transparency and traceability!”.

Sigrid Ligné, Secretary General of the EGBA added: “The German Interstate Treaty is incompatible with EU law, and its adoption has left us with no other choice but to make a formal complaint to the EC. We urge the Commission now to fast track our complaint and launch infringement proceedings against Germany”.

press release of EGBA

Liechtenstein to offer remote gaming licence?

2008-01-06T00:13:00.000Z

by Martin Arendts

The Pricipality of Liechtenstein might follow the role model of Gibraltar and offer remote gaming licenses. The head of the government, Otmar Hasler, recently announced that a consulation paper with the draft of a new Casino Act (Spielbankengesetz) will be completed by February 2008 and published soon afterwards. According to Hasler, the Casino Act will also cover remote gambling.

Liechtenstein is a tiny, but sovereign state, situated between Austria and Switzerland. However, unlike Switzerland, Liechtenstein is a full member of the European Economic Area (EEA) Agreement. This Agreement guaratees the freedom to provide services within the EEA (EU member states and - apart from Liechtenstein - Iceland and Norway). So, a Liechtenstein licence might be interesting for remote gaming operators offering their services on a pan-European scale to customers in the EEA member states.

Two more refferals to the ECJ from the Administrative Court of Giessen

2007-11-16T12:55:00.000Z

by Martin Arendts, M.B.L.-HSG

The Administrative Court of Giessen (Verwaltungsgericht Gießen) has reffered two more sports betting cases (interdiction orders against betting shops, tranferring bets to private bookmarks licensed in another EU member state) to the European Court of Justice (ECJ) according to Article 234 EC Treaty. Earlier this year, the court already reffered a similar case to the ECJ (Markus Stoß v Wetteraukreis; Case C-316/07).

The two new cases have been filed as:

Avalon Service-Online-Dienste GmbH v Wetteraukreis (Case C-409/07) and

Olaf Amadeus Wilhelm Happel v Wetteraukreis (Case C-410/07).

Now, seven German sports betting cases are pending before the ECJ (one from Cologne, three each from Stuttgart and Giessen). As the Administrative Courts of Giessen and Stuttgart asked quite similar questions, it is quite likely that the ECJ will join these cases. A decision will probably be announcend in two or three years.

The Administrative Court of Giessen asked the ECJ following questions:

Are Articles 43 and 49 EC to be interpreted as precluding a national monopoly on certain gaming, such as sports betting, where there is no consistent and systematic policy to limit gaming in the Member State concerned as a whole, in particular because the operators which have been granted a licence within that Member State encourage participation in other gaming - such as State-run lotteries and casino games - and, moreover, other games with the same or a higher suspected potential danger of addiction - such as betting on certain sporting events (e.g. horse racing) and slot machines - may be provided by private service providers?

Are Articles 43 and 49 EC to be interpreted as meaning that authorisations to operate sports betting, granted by State bodies specifically designated for that purpose by the Member States, which are not restricted to the particular national territory, entitle the holder of the authorisation and third parties appointed by it to make and implement offers to conclude contracts also in other Member States without any additional national authorisations being required?

Settlement agreement with sellers of Ongame frees bwin from payment of purchase price of EUR 79.9 million including interest

2007-11-09T12:32:00.000Z

ad-hoc-release of bwin

In connection with the bwin Games transaction (formerly Ongame Group), bwin and the sellers agreed on a deferred consideration with a potential value of EUR 83.0 million including interest as of settlement date.

The introduction of the so-called "Safe Port Act", which also contained several provi-sions of the "Unlawful Internet Gambling Enforcement Act of 2006", effectively prohibited payment transactions in connection with online gaming in the United States. In response to this law, bwin suspended its real-money gaming operations for US customers in the autumn of 2006.

In spring this year, bwin entered into negotiations with the former majority shareholders of bwin Games, who sold 96.3% of the company's shares. bwin has now reached agreement with this group of sellers to the effect that they will waive the purchase price owed amounting to EUR 79.9 million including interest. bwin also intends to enter into talks with the other sellers with respect to the remaining amount of the deferred consideration of EUR 3.1 million.

In return for waiving this claim, this group of sellers will receive 28.89% of the net gaming revenues generated with US customers over a period of five years should bwin reintroduce real-money gaming products for US customers, albeit capped to EUR 79.9 million. Net gaming revenues are defined as the balance of betting stakes and customer winnings less all expenses, such as marketing costs, taxes and duties, commissions to third-party software providers for gaming applications and payment transaction costs, including chargebacks by US customers. Furthermore, the buyers will be released from all remaining lock-up obligations on the sale of the bwin shares which they received as part of the purchase price.

This agreement fully settles the bwin Games transaction with this group of sellers.

EGBA condemns detention of Unibet CEO and France’s disrespect of EU law

2007-10-26T22:34:00.000Z

Following a European arrest warrant issued by the French authorities, Petter Nylander, CEO of Unibet, a European publicly listed company has been arrested in the Netherlands on 22 October 2007. The European Gaming and Betting Association, of which Unibet is a member, strongly disapproves this action.

The arrest comes at a time, when France’s legislation on gaming is being challenged both at EU and national level. These actions by French authorities completely disregard the European Commission’s Reasoned Opinion of June 2007, which underlined the disproportionality of threatening and imposing criminal sanctions on CEOs of sports betting companies licensed in the EU. The 2007 European Court of Justice’s verdict “Placanica” confirmed that criminal proceedings brought against legitimate operators based in other EU member states are in contradiction with the EU Treaty.

With a few days to go before the expiration of the deadline to answer the Reasoned Opinion, which has already been extended by two months to allegedly facilitate dialogue and solutions between all parties, the EGBA questions the objectives of the French government today. On the one hand, France has recently and repeatedly claimed its willingness to cooperate with the European Commission, while on the other hand it enforces the same criminal sanctions as one year ago. Norbert Teufelberger, chairman of EGBA, said: “History is repeating itself. Therefore, we now urge the European Commission to adopt swift measures against France. Petter Nylander has all the support of the EGBA, and we call on French and Dutch authorities to immediately end these disproportionate sanctions. ”

press release of EGBA

Legal terms explained: interstate treaty (Staatsvertrag)

2007-10-26T09:46:00.000Z

by Martin Arendts

In Germany, the new Interstate Treaty on Gambling (Glücksspielstaatsvertrag) shall replace the current Interstate Treaty on Lotteries (Lotteriestaatsvertrag) on 1 January 2008. Why does Germany not simply pass a Gambling Act?

In the Federal Republic of Germany, as is officially called, the 16 German states (Länder) and the federal state (Bund) have different jurisdictions. In the past, gambling and sports betting (with the exception of horse betting) has been regulated by the states (however, the Federal Constitutional Court expressly mentioned the possibility of a new regulation by the Federal Parliament, as sports betting has to be regarded as a business matter).

Matters, falling under the jurisdiction of the states, can be regulated not only by normal state acts, but also by interstate treaties. The idea behind an interstate treaty, that is a treaty between all 16 states, is is the creation of uniform law, without giving the jurisdiction to the federal state. Interstate treaties are quite common to regulate media matters, e.g. Interstate Treaty on Broadcasting (Rundfunkstaatsvertrag) and Interstate Treaty on Media Services (Mediendienste-Staatsvertrag). Interstate treaties have to be ratified by the state parliaments and are regarded as state law.

Three Referrals to the ECJ from the Administrative Court of Stuttgart

2007-10-24T13:05:00.000Z

References for a preliminary ruling from the Verwaltungsgericht Stuttgart (Germany), lodged on 2 August 2007

Kulpa Automatenservice Asperg GmbH v Land Baden-Württemberg
(Case C-358/07)

SOBO Sport & Entertainment GmbH v Land Baden-Württemberg
(Case C-359/07)

Andreas Kunert v Land Baden-Württemberg
(Case C-360/07)

Questions referred:

1. Are Articles 43 and 49 EC to be interpreted as precluding a national monopoly on certain gaming, such as sports betting and lotteries, where there is no consistent and systematic policy to limit gaming in the Member State concerned as a whole, because the operators which have been granted a licence within that Member State encourage and advertise participation in other gaming - such as State-run sports betting and lotteries - and, moreover, other games with the same or even higher potential danger of addiction - such as betting on certain sporting events (horse racing), slot machines and casino games - may be provided by private service providers?

2. Are Articles 43 and 49 EC to be interpreted as meaning that authorisations to operate sports betting, granted by the competent State bodies of the Member States, which are not restricted to the particular national territory, entitle the holder of the authorisation and third parties appointed by it to make and implement offers to conclude contracts in other Member States as well without any additional national authorisations being required?

Referral to the ECJ from the Administrative Court of Giessen

2007-10-24T13:02:00.000Z

Reference for a preliminary ruling from the Verwaltungsgericht Giessen lodged on 9 July 2007 - Markus Stoß v Wetteraukreis

(Case C-316/07)

Questions referred:

Are Articles 43 and 49 EC to be interpreted as precluding a national monopoly on certain gaming, such as sports betting, where there is no consistent and systematic policy to limit gaming in the Member State concerned as a whole, in particular because the operators which have been granted a licence within that Member State encourage participation in other gaming - such as State-run lotteries and casino games - and, moreover, other games with the same or a higher suspected potential danger of addiction - such as betting on certain sporting events (e.g. horse racing) and slot machines - may be provided by private service providers?

Are Articles 43 and 49 EC to be interpreted as meaning that authorisations to operate sports betting, granted by State bodies specifically designated for that purpose by the Member States, which are not restricted to the particular national territory, entitle the holder of the authorisation and third parties appointed by it to make and implement offers to conclude contracts also in other Member States without any additional national authorisations being required?

bwin plans retail pilot project in Spain

2007-10-18T16:34:00.000Z

The sports betting law that came into effect in the province of Madrid on 7 January this year permits and regulates the operation of retail betting shops based on the UK model.

bwin has been a prime sponsor of Real Madrid since 1 July this year, and has since dramatically increased its brand awareness in Spain. A pilot retail project is now being developed in Madrid in collaboration with Betbull Plc, an experienced betting shop operator in which bwin holds a strategic investment. The final licence application will be submitted to the authorities shortly, and the first betting shop under the bwin brand is scheduled to open in Madrid in the first quarter of 2008. The pilot project is intended to show the extent to which bwin's strong brand awareness can be successfully transferred to the retail sector. Details of financing will be published once the necessary licence has been issued.

press release of bwin, 18 October 2007

Betting licence procedures under tight EU scrutiny

2007-09-13T22:32:00.000Z

The European Gaming and Betting Association (EGBA) welcomes the ruling of the European Court of Justice in the case (C-260/04) concerning the renewal of horse race betting licences in Italy which states that “the Italian Republic failed to fulfil its obligations under Articles 43 (freedom of establishment) and 49 (freedom to provide services) of the EC Treaty“. In particular, the Court found that „the Italian authorities infringed the general principle of transparency and the obligation to ensure a sufficent degree of advertising“. Today’s court decision is in line with previous ECJ rulings reached in the Gambelli and Placanica cases.

According to the ECJ, Italian authorities cannot restrict access to European operators simply for the purpose of guaranteeing “continuity, financial stability and a proper return on past investments for licence holders”. Moreover, the Italian argumentation failed to show how the renewal or maintenance of the old concessions without a tendering procedure would in any way help to prevent clandestine betting.

According to Sigrid Ligné, Secretary General of the EGBA: „The Court’s decision sends a clear signal to Member States currently offering, or planning to offer, licences to European gaming and betting operators. The Court clearly states that the licensing must be undertaken within a set of clear and strict parameters, which are in line with the EC treaty. The Court‘s decision also underlines that these licences cannot be awarded without a transparent, competitive and fair tendering procedure“.

The EGBA considers today’s ECJ ruling marks an important step towards a regulated European gaming and betting market and encourages Italy and other EU Member States to review their legislation.

press release EGBA, 13 September 2007

ATE and River City Group to Merge and Re-brand as Clarion Gaming

2007-09-13T10:17:00.000Z

Following on the successful purchase of two key gaming industry event/publication companies by Clarion Events, a merger of those into a single entity called Clarion Gaming will begin in September 10, 2007 and be complete by early 2008.

ATE produces the major London exhibitions ICE and ICEi, along with The Betting Show and other conference events. In July 2006, ATE was joined by sister company, River City Group. Together we produce the European I-Gaming Congress and Expo (EiG) and BetMarkets. River City Group produces the Global Interactive Gaming Summit and Expo (GIGSE), World Poker Congress, Asian i-Gaming Congress (AiG, formerly PCIG) and I-Gaming InDepth conferences. In addition, both companies are responsible for key trade publications such as IGaming News, Betting Business, and Casino Review among others.

Simon Kimble, Managing Director of Clarion Events in London, said, "We made these two strategic purchases to get a foothold in serving the global gaming industry. We expect, as these two companies integrate, that they will form a dynamic foundation allowing us to assemble yet more key gaming industry event and publication companies in various regions of the world."

What does this mean for River City Group clients? Our staff and services will remain essentially the same and we plan to continue to offer the same trusted services to you as our readers, delegates, exhibitors and sponsors. This merger will allow us, and by extension, our clients, a broader reach as the lines between terrestrial and online gaming services continue to blur. We’ll be offering a combined suite of events and even more innovative digital information services so that you can best reach your markets.

Clarion Gaming, as the newly merged companies will be known, will espouse the same principles that have allowed River City Group and ATE to become the standard by which gaming companies gauge conferences and exhibitions serving their markets. Under this new moniker, we look forward to the opportunity to improve even further upon our new and established business relationships via the increased resources and reach of a shared identity and assets.

German Courts On Hold For ECJ Guidance

2007-08-21T08:20:00.000Z

http://www.gamblingcompliance.com/

by James Kilsby

A High Court decision last week boosted the hopes of a number of private betting operators still facing charges brought by German authorities before early 2006 but a spectacular backlog of cases looks set to accumulate over the coming years as a third sports betting case is referred to the European Court of Justice.

Casual observers of the German gambling market could be forgiven for feeling as though understanding the legal situation surrounding sports betting in the country is a predicament that somehow corresponds to that faced by Josef K in Kafka’s ‘The Trial.’

In a non-fictional trial last week, however, Germany’s highest federal court expressed some sympathy for bookmakers who have been directly entangled in the uncertainty by upholding a regional court’s decision to dismiss charges brought against a bookmaker accused of operating illegal betting in the state of Saarland in 2003 and 2004. The High Court confirmed the assertion of the regional court that the bookmaker had committed an “inevitable error” due to the complexity and uncertainty surrounding the legal status of sports betting in Germany during the period in question.

According to leading German gaming lawyer Martin Arendts of the firm Arendts Anwalte, the decision is of great significance for other bookmakers still facing prosecution over their activities during the period up until the Constitutional Court verdict of March 2006 which sought to bring clarity to what was, as the High Court duly recognises, a muddled and constitutionally uncertain legal situation. Arendts suggests that the volume of cases that have continued to be brought since March 2006 means that the High Court’s latest clarification barely scratches the surface of the mountain of litigation involving bookmakers active in the German market.

“This is not such a big decision,” says Arendts. “It is relevant for the few hundred old cases from 2004 and 2005, but not for most of the cases that are currently pending before the German courts - and we have thousands of cases now.”

The fates of those thousands of cases could effectively be decided in Luxembourg rather than in Berlin or Munich as, despite the March 2006 ruling and the likely adoption of a new interstate gambling treaty in January 2008, German courts have begun to look to the European Court of Justice to determine the compatibility of German legislation with European Community law. A court in Stuttgart referred the third sports betting case from Germany to the ECJ in July, following courts in Gießen (May 2007) and Cologne (September 2006).

According to Arendts, the Stuttgart court seeks ECJ clarification on similar issues to its counterpart in Gießen in order to establish the rights of German authorities to prevent foreign bookmakers from offering their services within German and whether a sports betting monopoly (which would be maintained by the current draft interstate treaty) is legal under European law.

Despite the Federal High Court’s decision in Karlsruhe last week, it seems apparent that the number of pending cases in Germany is only set to grow whilst the referred cases await hearing in the ECJ. For example, Arendts says that courts in Stuttgart will await the ECJ’s decision before presiding over the 200 sports betting cases already filed in the state. If, as Arendts believes is possible, other state and Federal courts adopt the same ‘wait-and-see’ approach, uncertainty could continue to reign until the first German betting case is heard in the ECJ, an event that is unlikely to happen for 2 or 3 years at least. “We haven’t seen any new decisions since the latest referral but it might well change the attitude of a few of the courts,” Arendts says.

bwin Video Webcast

2007-08-16T13:12:00.000Z

bwin cordially invites you to participate in the online presentation following the publication of the second quarter and first half year of 2007. The presentation will be simultaneously transmitted in English.

Date: Thursday, 23 August 2007
Time: 9.30 - 9.45 a.m. CET (3.30 - 3.45 a.m. EST)
Webcast: www.bwin.ag

The presentation will be held by Norbert Teufelberger, Co-CEO of bwin.

N.B.: To participate via the Internet, you need Windows Media Player. Please remember to install the necessary software in time before transmission begins. (Download: Media Player®)

A recording of the Webcast will be available in German and English on the bwin Investor Relations website at www.bwin.ag and www.ots.at about one hour after the presentation has ended.

The bwin Group has over 11 million registered customers (including 7 million "play money" customers) in over 20 core target markets. Operating under international and regional licences in countries like Gibraltar, Kahnawake (Canada) and Germany, Italy, Mexico, Argentinia, Austria and the United Kingdom, the Group has set itself the goal of becoming the number one address for sports betting, games and entertainment via digital distribution channels. The Group offers sports betting, poker, casino games, soft and skill games, as well as audio and video streams on top sporting events such as the German Bundesliga. The parent company bwin Interactive Entertainment AG has been listed on the Vienna Stock Exchange since March 2000 (ID code "BWIN", Reuters ID code "BWIN.VI"). Further information about the Company can be found on its investor relations website at www.bwin.ag.

European Court of Justice decides on Euro Millions

2007-07-23T12:41:00.000Z

by Martin Arendts, M.B.L.-HSG

After several cases on sports betting the European Court of Justice (ECJ) will, once again, decide on a lotteries case. A Belgian court, Rechtsbank van koophandel Hasselt, referred a case concerning the pan-European lottery Euro Millions to the ECJ (Case C-525/06, Nationale Lotterij). Plaintiff in the Belgian case is NV de Nationale Loterij, the monopoly operator in Belgium. The defendant is BVBA Customer Service Agency, which offers the participation as a group in Euro Millions.

The Belgian lottery monopoly has been justified by the public interest, mainly the prevention of squandering through gaming. The Belgian court somehow does not really seemed to be convinced by this reasoning. It referres to the fact that advertising in reality strenghens gaming compulsion and that Nationale Loterij is induced by the present system to maximise turnover. It also raises the question whether there are less obstructive measures than a monopoly, such as restriction of possible stakes and winnings.

Apart from that, the Belgian court, in its second question to the ECJ, asks whether a distribution company as the defendant can argue with the freedom to provide services. Especially this question is releveant for EU Member States where gaming monopoly products are (also) distributed by private companies (e.g. Germany which tries to ban any private distribution with the planned Interstate Treaty on Gambling, Glücksspielstaatsvertrag).

The ECJ will have to answer following questions, the Belgian court referred to Luxembourg:

1. Is Article 49 of the EC Treaty to be interpreted as meaning that restrictive national provisions, such as Article 37 of the Law of 19 April 2002, which obstruct the access to the market of an undertaking wishing to sell for profit group participation forms in Euro Millions, are still permitted having regard to the public interest (prevention of squandering through gaming), in the knowledge that:

(a) the Nationale Loterij, which acquired a statutory monopoly from the Belgian State and pays a monopoly rent for it and which has the objective of channelling man's inherent compulsion to gamble, regularly advertises participation in Euro Millions thereby in reality strengthening that compulsion;

(b) the regular advertising by Nationale Loterij and its sales methods have a foreclosure effect, in which the Nationale Loterij is induced to maximise turnover (financial reasons) rather than channel the citizens' inherent compulsion to gamble;

(c) less obstructive measures, such as restriction of possible stakes and winnings, would better achieve the objective pursued, namely the channelling of the inherent compulsion to gamble?

2. Is a restrictive national provision such as Article 37 of the Law of 19 April 2002, which prevents the access to the market of an undertaking intending to sell, for profit, group participation forms in Euro Millions, contrary to the freedom to provide services (Article 49 of the EC Treaty) where the defendant itself does not organise a lottery but in fact seeks to organise, for profit, merely participation as a group in Euro Millions via the Nationale Loterij's own participation forms?

Germany Set For EU Showdown As Schleswig-Holstein Backs Controversial Interstate Treaty

2007-07-11T08:48:00.000Z

by James Kilsby, www.gamingcompliance.com

In a move that will stun observers, the state government of Schleswig-Holstein has declared its intention to ratify the draft Interstate Lotteries Treaty, shelved since December 2006. According to one gaming lawyer, the move could lead to a “war” with the European Commission.

The Schleswig-Holstein cabinet yesterday authorised Prime Minister Peter Harry Cartensen to add his signature to the draft Interstate Lotteries Treaty. Cartensen had been the one state PM to refuse to sign the Treaty when it was debated in December 2006 by all sixteen state Prime Ministers, stating that Germany should instead wait for further guidance from Brussels before adopting new legislation on betting, as a Constitutional Court verdict from March 2006 requires it to by January 1, 2008.

The Treaty, in its current form, prohibits the use of the internet for all forms of gambling in Germany, with the exception of horserace betting, as well as extending the monopoly on lotteries and sports betting services to the state lottery companies cartelised into Deutscher Lotto- und Totoblock for a further four years, until 2012. The Treaty also obliges German financial institutions to block attempted online payments for gambling services.

What makes yesterday’s news all the more surprising, given Schleswig-Holstein’s reasoning at the end of last year, is that the European Commission has made abundantly clear that it considers the Treaty to be a blatant violation of EC law. The Commission has already sent Germany two letters in the form of Detailed Opinions. In the first letter in March, the Commission stated that it does not consider the proposed ban on the use of the internet to be “proportionate” to achieve stated aims of combating gambling addiction, nor consistent given the ban specifically excludes gambling on horseracing.

The Commission went further in its objections to the Treaty in the second Detailed Opinion sent to Germany in May. According to the Commission, not only is the Treaty non-compliant with European competition laws and against the principle of freedom of establishment enshrined in the Treaty of Rome, but it also violates laws protecting the free movement of capital with the Union and does not form part of coherent policy given that restrictions on advertising apply only to betting and not to slot machines.

The January 1, 2008 deadline set by the Constitutional Court means that the German gambling industry would enter a period of legal uncertainty were the Lander unable to reach a consensus and that uncertainty could affect the state’s ability to secure revenue from state lotteries and betting services to fund sports and other social programs. These concerns, combined with the entrenched position of other states in favour of a blanket extension of the state gambling monopolies, go some way to explaining the surprise decision taken by the Schleswig-Holstein cabinet yesterday. “There are at present no viable alternatives to securing revenue from gambling,” said Prime Minister Cartensen, explaining the decision.

“At the last conference of the German state Prime Ministers, Schleswig-Holstein suggested that, if it was the last state standing against the Treaty, it would be forced to sign it,” notes Martin Arendts, a leading German gaming lawyer with the firm Arendts Anwalte. “There have been doubts expressed by other state governments regarding the Treaty, by Baden-Wurttemberg in particular, but what Schleswig-Holstein had to do [to create an alternative solution] was to convince two or three other states to firmly oppose the Treaty – and it has definitely failed to do so.”

(...)

Presuming none of the other fifteen Lander have an even more dramatic change of heart on the gambling issue, and the draft Treaty is duly signed later this year, Germany can expect to find itself at loggerheads with the European Commission. “There were reports in the German magazine ‘Der Spiegel’ that the Commission was looking to reach some sort of compromise with Germany over betting but this is not a compromise; it’s a clash of opinions,” says Arendts. “It looks like there is going to be some sort of war between Germany and the European Commission - the European Commission has already said in its previous letters that there will definitely be another infringement proceeding if the draft Treaty is adopted.”

Although yesterday’s news can be considered progress towards the adoption of new legislation, the future of the industry has arguably never been less clear given the inevitability of legal challenges in both European and German courts. “Even the German civil servants responsible for drafting the Treaty concede there are problems with it given that casinos and slot machines will not be subject to same level of protection as betting and lotteries,” says Arendts. “If you look at the most recent EFTA Court decision on the case between Ladbrokes and the Norwegian government, the need for states to show consistency in their gaming policy as a whole is important – and there is definitely not a coherent policy in Germany.”

www.gamblingcompliance.com

Talks between bwin and Sportingbet discontinued

2007-07-04T10:37:00.001Z

Ad-hoc Release of bwin:

On 7th March 2007, bwin Interactive Entertainment AG announced that it was in preliminary discussions with the Board of Sportingbet plc about the possible acquisition of Sportingbet plc. Sportingbet plc has announced that these discussions have now been amicably discontinued.

The bwin Group has over 11 million registered customers (including 7 million "play money" customers) in over 20 core target markets. Operating under international and regional licences in countries like Gibraltar, Kahnawake (Canada), Belize and Germany, Italy, Mexico, Argentina, Austria and the United Kingdom, the Group is the number one address for sports betting, games and entertainment via digital distribution channels. The Group offers sports betting, poker, casino games, soft and skill games, as well as audio and video streams on top sporting events such as the German Soccer League. The parent company, bwin Interactive Entertainment AG, has been listed on the Vienna Stock Exchange since March 2000 (ID code "BWIN", Reuters ID code "BWIN.VI"). All details about the company can be found on its investor relations website at www.bwin.ag.

First extensive medical research about online gambling

2007-06-28T09:33:00.000Z

For the very first time researchers from the Harvard Medical School faculty from the Division on Addictions have been able to analyse the behaviour of online gamblers during their gambling activities.

The study has followed a sample of more than 40.000 individual online gamblers over a period of 8 months. It is the first time ever that such a large investigation is based on the actual online gaming behaviour rather than on self-reports. This has been made possible due to the collaboration with the private online operator and EGBA member bwin that has opened its data centre to the researchers of Harvard Medical School. The first publication of this ongoing research study can be found under http://www.divisiononaddictions.org/html/library.htm.

Preliminary results of this ongoing study have been presented by Drs. Howard Shaffer and Richard LaBrie of Havard Medical School at a workshop hosted by EGBA in which leading experts in the field of gaming, addiction and social responsibility took part. "Addiction has on many occasions been raised as one of the concerns associated with gambling related activites. Our intensive research reveals that many different elements contribute to the fact that only a very small proportion of people experience gambling addiction, whether online or with traditional forms of gambling. Moreover, the most striking result of this research shows that the assumption of a typical gambler being somebody out of control is fundamentally wrong. This data shows that a typical online gambler risks 148€ and has a loss of about 33€ during a period of 8 months" according to professor Howard J. Shaffer, head of this research project.

"We are very pleased that one of our members, bwin, has been willing to contribute to such an important scientific project. This study and its first results bring some important insight to the behavioural aspects and helps us all better understand what possible problems may arise and how to minimise them. EGBA has always stressed that any policy decision should be based upon scientifically proven facts and figures. We therefore call upon national governments and the scientific community in Europe to take these methodologies into account and conduct further studies when regulating online gambling." says Sigrid Ligné, secretary general of the EGBA, the European association of private online gaming and betting operators. “In order to gain a more comprehensive understanding of online gambling, extensive research needs to be conducted.

This study has the merit that it shows for the first time the very limited impact on addiction among online gamblers. But at the same time education remains necessary and governments have a responsibility to take up this aspect", according to Geoffrey Godbold, CEO of GamCare in London. EGBA reminds regulators that this peer-reviewed study proves its awareness of and commitment to responsible gaming. Moreover, all EGBA members are bound to comply with the EGBA Code of Conduct. This self-regulation system was set up by investigating industry best practice, leading jurisdictions and state monopoly standards and will be independently monitored.

press release EGBA

EGBA welcomes the adoption of a Code of Conduct on sports betting by 23 European Lotteries

2007-06-28T09:24:00.000Z

The EGBA, representing the main European online gaming and sports betting operators, welcomes the adoption of a code of conduct on sports betting by 23 European lotteries, and calls on the remaining to do the same. EGBA members have already adopted a strict and obligatory code of conduct since 2003 in protecting players, fighting money laundering and gambling addiction in sports betting and all other games offered online.

Private operators have for several years taken strong commitments and actions to offer safe and secured online games and bets. According to Sigrid Ligné, Secretary General of the EGBA, “in the specific case of sport betting, private initiatives such as the European Sports Security Association (www.eu-ssa.org), are already largely contributing to enhance clean and fair sports by alerting the competent sport regulators on irregular betting patterns. ESSA has signed specific cooperation agreements with FIFA, UEFA, and the Royal Belgian Football Association. The EGBA recalls that corruption of sport teams is strongly damaging clubs, gaming operators and players.

By adopting their code of conduct, lotteries are following the example of EGBA members who implemented a strict code of conduct since the creation of the association in 2003. In the frame of corporate responsibility, EGBA members have taken strict measures such as the regular checking of IDs, providing assistance to problem gamblers, implementing the strictest anti money laundering standards, and preventing taking bets on questionable sport events.

press release EGBA

EGBA welcomes further steps to remove national gambling protectionism

2007-06-28T09:20:00.000Z

The European Gaming & Betting Association (EGBA), welcomes today’s decision by the European Commission to challenge two of the largest EU gambling monopolies by sending a reasoned opinion to Sweden and France and by pursuing infringement proceedings against Greece.

“As the guardian of the EU Treaty, the Commission has taken another important step towards removing unjustified restrictive national measures and creating a level playing field and a single market across the EU. The measures designed to protect national or regional markets do nothing to serve the population of the EU - they are discriminatory, inconsistent and clearly against both progress and simple single market principles”, says EGBA Secretary-General Sigrid Ligné. “While this is an important step forward, we urge Finland, Hungary, Denmark and now Sweden and France to follow the clear requests of the Commission to bring their legislation in conformity with EU law. It is time now for the Governments to accept a dialogue with the leading European operators and to seek the development of sustainable and fair regulation in order to prevent lengthy court actions.”

Today’s decision to send a Reasoned Opinion against Sweden shows that the Commission’s infringement procedures can be suspended only on the basis of solid evidence that the national authorities are in the process of bringing the targeted national legislation in full conformity with EU law.

The EGBA hopes that France’s new government will understand that accepting the principles laid down in the EU Treaty and working closely with the European Commission is the only way to meaningfully regulate the gambling and betting industry in Europe, an industry that like many other sectors, now transcends state borders through the Internet. Proper regulation and control of this increasingly popular activity is the only sensible way forward as demonstrated in several other EU Member States, including the UK.

OPAP, the Greek national monopoly, has over the years continued to maximise its profits, expanding its activities beyond the Greek borders while preventing a fair access of EU operators to its market. “The decision to open an infringement procedure against Greece was widely expected since the purpose of OPAP is clearly not to seek a genuine decrease of gambling opportunities” says Ligné.

Sigrid Ligné also said: “To claim that only closed, nationally monopolistic markets can protect the consumer when it comes to gambling services is clearly untrue. It is a fact that EGBA’s Code of Conduct applies to all of its members in addition to their national legal requirements, and is independently verified. It requires additional standards of consumer protection and social responsibility that match or even exceed those established by many EU gambling monopolies.” In particular, the Code seeks to address a number of key concerns such as problem gambling and by ensuring that children are prevented from playing and that vulnerable players are properly protected. “In our view, European adults have the right to use the Internet for gambling services if they so choose and should be able to access properly regulated and legitimate service providers, irrespective of their location in the EU. Ultimately, the nature of the Internet means that the best way to guarantee that all public and private actors comply with appropriate rules and regulations would be to agree on a framework at the EU level” says Sigrid Ligné.

press release EBGA

Infringement proceedings against France, Sweden and Greece

2007-06-27T15:26:00.000Z

Crucial development for private gaming sector:
- Infringement proceedings against France and Sweden to be continued
- Initiation of infringement proceedings against Greece
- Austria yields to pressure from Commission in infringement proceedings

bwin welcomes today's decision by the European Commission to continue the infringement proceedings already instituted against France and Sweden in connection with gaming by issuing reasoned opinions. These so-called reasoned opinions represent the second stage in infringement proceedings. If the countries involved do not now take the demands of the European Commission into account, they are liable to be taken before the European Court of Justice.

The fact that Greece now also sees itself confronted with infringement proceedings can be attributed to the many protectionist measures on the Greek gaming market that are not in compliance with EU legislation.

The European Court of Justice recently declared Sweden's alcohol monopoly to be in contravention of EU legislation, and the gaming monopoly is now also coming under increasing pressure. The fact that, in the opinion of the European Court of Justice, the alcohol monopoly is not in conformity with the basic freedoms of the European Union makes us optimistic that the enlightened regulation of the gaming market will soon be forthcoming, commented Norbert Teufelberger, bwin Co-CEO.

Even France, which in the past has acted particularly aggressively towards private gaming providers licensed in the EU, has not managed to convince the Commission that its monopoly of gaming and horseracing is in conformity with EU legislation. In a detailed opinion the Commission has sharply criticized the discrepancies in the existing French regulations.

The initiation of infringement proceedings against Greece is also an indication that monopolies - even in sensitive areas such as alcohol, banking and gaming - are no longer in keeping with the times, and that cross-border solutions in keeping with EU legislation are called for instead. Only very recently, Greek market makers have frequently found themselves confronted with criminal proceedings, whereas the government's publicly listed OPAP company was free to maximize profits in the interests of shareholder value. This makes the Commission's decision to institute infringement proceedings all the more gratifying, said bwin Co-CEO Manfred Bodner.

The Austrian government has so far been unable to refute the Commission's accusations in the infringement proceedings against Austria. The Austrian government has therefore been obliged to assure the Commission that appropriate amendments will be made to its gaming laws with respect to the discrimination of foreign gamers and advertising restrictions for non-Austrian providers. If Austria fails to implement these amendments within the next few months, this would be in blatant infringement of European legislation, and the Commission would continue its formal infringement proceedings by initiating the second stage. This concession by the Austrian government shows that members states are aware that national gaming monopolies are not compatible with European law, and cannot therefore be sustained in the long term. This represents a positive step towards a modern, competitive legislative framework for cross-border gaming.

The bwin Group has over 11 million registered customers (including 7 million "play money" customers) in over 20 core target markets. Operating under international and regional licences in countries like Gibraltar, Kahnawake (Canada), Belize and Germany, Italy, Mexico, Argentina, Austria and the United Kingdom, the Group is the number one address for sports betting, games and entertainment via digital distribution channels. The Group offers sports betting, poker, casino games, soft and skill games, as well as audio and video streams on top sporting events such as the German Soccer League. The parent company, bwin Interactive Entertainment AG, has been listed on the Vienna Stock Exchange since March 2000 (ID code "BWIN", Reuters ID code "BWIN.VI"). All details about the company can be found on its investor relations website at www.bwin.ag.

press release bwin

Deal Rumours Suggest Legal Uncertainties Growing In Germany

2007-06-26T09:39:00.000Z

www.gamblingcompliance.com 26 June 2007

by James Kilsby

With pressure growing from both its national courts and the European Commission to determine a coherent gambling policy, politicians charged with steering Germany towards new gambling legislation are showing signs of denial.

Observers of the German gambling market have expressed surprise at the state Prime Ministers’ failure to approach the topic of gambling at the most recent prime ministerial conference in Berlin last Friday.

“At least as far as I’m aware, gambling was not discussed at the meeting,” says German gaming lawyer Martin Arendts, of the firm Arendts Anwalte. In accordance with a constitutional court ruling of March 2006, the Prime Ministers of the sixteen German Lander must unanimously adopt new legislation covering betting in Germany before January 1, 2008. The court found the existing state monopoly to be unconstitutional in its current form.

Expectation that the Prime Ministers would come round to addressing gambling at the latest meeting, after their failure to do so in March, had been raised by the European Commission’s continued interest in the current draft for new legislation, which the Commission clearly considers to be totally at odds with various aspects of European Community law. PR campaigns from private lottery companies highlighting the need for new legislation further served to raise the issue’s profile in the German media, one gaming company even taking out a full-page advertisement in a German newspaper.

The lack of news following last Friday’s meeting will therefore be of surprise to many, of disappointment to some and a relief to others. A report published in popular German weekly publication Der Spiegel on Saturday, and since circulated widely by Reuters, suggests instead that the state Prime Ministers are awaiting further guidance from the European Commission on the matter. According to Der Spiegel, representatives from the German Lander have arranged to meet with the European Commission sometime in early July.

Der Spiegel also reports that the German states have been offered a form of compromise deal by the European Commission that would allow the states to keep their lottery monopolies so long as the German sports betting market is opened to private operators. If sports betting was liberalised “the Commission would in no way challenge the existence and continuation of the states’ monopolies on lotteries and other forms of gambling,” says the report, citing an anonymous source in Brussels.

Given that it is the duty of the European Commission to monitor all European markets, such a clear-cut compromise certainly seems unlikely to be binding. Arendts agrees that any deal with the Commission could only be a temporary solution. “I cannot imagine how such a compromise would work,” he says.

According to Arendts, a compromise in which sports betting was liberalised would allow the European Commission to draw a line under the open infringement investigation into the German sports betting market, which could even be raised to the level of a Reasoned Opinion this week, as well as rendering the Commission’s investigation into the draft Interstate Lotteries Treaty obsolete as that would not be adopted. “It could only relate to the infringement proceedings that are already open,” he says.

A compromise between the Commission and Germany would not have any bearing on future cases to be decided in courts in either Germany or Luxembourg. “A deal would not have any effect on upcoming court cases within Germany – of which there are thousands. There are also two cases (related to cross-border gambling) due in the European Court of Justice and the ECJ doesn’t care about political compromises,” says Arendts.

Severe doubts surrounding the legitimacy of the states’ lottery monopolies, monopolies that would presumably go unchallenged by the Commission under the terms of the agreement over sports betting, have been raised by recent German court rulings. Last week, the Federal Supreme Court upheld rulings delivered by both the Federal Cartel Office and the Higher Regional Court in Dusseldorf that the cartel of German state lottery companies, Deutscher Lotto- und Totoblock, has contravened both German and European anti-trust law by agreeing not compete within one another across German state borders.

In the current situation, an agreement with the European Commission would by no means ease all of Lotto- und Totoblock’s woes. Moreover, according to Arendts, even if the European Commission has offered a compromise, there is no guarantee that it would prove to be an acceptable political solution to the German Lander, as the Prime Ministers of certain states remain determined to keep sports betting under state control. “It will be very hard to agree a compromise. Various German states would not agree to this,” he says.

For Arendts, the lack of discussion on the issue last week further increases the possibility that the German states will be unable to agree on legislation before the deadline set by the constitutional court. “They are really running into trouble. Not only do they have to find a solution but also they have to pass a Parliamentary Act. Most state Parliaments have ignored the problem until now.”

One option would be for the Bundestag to take the matter out of the states’ hands and pass a federal law. Arendts does not consider this a likely alternative however. “The Bundestag sports committee had a meeting and decided not to pass a Federal law and this [position] is not going to change. If the Federal government stepped in, it would change the nature of ‘checks and balances’ between the Bundestag and the German states – they even changed the German constitution last year to protect these checks and balances so it is an extremely sensitive political situation.”

As the gambling industry approaches the second half of 2007, the odds appear to be shortening on Germany passing new betting legislation before the year’s end. The Federal Government could reluctantly still step in at that point to avoid the constitutional crisis that would ensue if no agreement is reached in the next six months. The lack of a consensus at a state level suggests that it may yet have to.

European Commission proposes gambling monopoly compromise

2007-06-25T15:03:00.000Z

According to the German magazine "Der Spiegel", the European Commission has offered Germany a compromise allowing it to continue with state monopolies on lotteries and casinos. The article reported that, by allowing sports betting firms to operate in its state jurisdictions, Germany would not face a challenge to the 'existence and continuation of the states’ monopolies on lotteries and other forms of gambling' by the EU.

First empirical study of online gaming behaviour

2007-06-24T13:42:00.000Z

To date, only speculations have been available to guide our understanding of the scale of gaming and problematic gaming behaviour among online sports betting. Now the initial results of a unique, broad-based study investigating the gaming behaviour of online players are available, which begins to shed light on the potential for gaming related problems.

Harvard Medical School faculty from the Division on Addictions have been active in the addiction research and treatment field for the past 30 years. They have been cooperating with bwin since May 2005 to undertake a research project the like of which has never been done before. For the first time ever, researchers are examining online gaming, not by means of difficult to verify opinions and self-report, but by carefully studying the actual online behaviour of players. In an anonymous study, researchers observed the actual behaviour of more than 40,000 active bwin users for a period of eight months. The first findings have now been published and might be surprising to some.

The first publication from this project is available at the Division on Addictions (http://www.divisiononaddictions.org/html/library.htm). The majority of the players observed in the course of the study exhibited moderate gaming behaviour. For example, the average loss of the players participating in this eight-month study amounted to 33 euro. Only 0.4% of the total sample could be classified as distinctively heavy bettors with large losses, suggesting that only a limited number of players might have serious financial problems. Further research will now investigate how many players report gaming related problems at every level of play.

These encouraging initial results from the long-term study indicate that the potential of sports betting to cause a problem is considerably lower than generally presumed. Drs. Howard Shaffer and Richard LaBrie of Harvard Medical School conducted a workshop on Thursday in Vienna attended by leading European gaming experts.

One of the workshop participants was Geoffrey Godbold, Chief Executive Officer of GAMcare. He said that "this research will help identify addictive gamblers at an early stage." He also suggested that, in terms of future regulation, "it is important not to spoil the fun of the majority but rather target the small minority that has problems."

Howard Shaffer noted, "This is a landmark project for both the gaming industry and science because we are studying the actual gambling behaviour of a large sample of Internet gamblers for the very first time. I am proud of bwin for committing to using science as a guide to assuring the welfare of their customers and to advancing the safety of the Internet and new technology."

"Particularly in view of the fact that gaming addiction is used generally as an argument to justify betting and gaming monopolies, these initial results are specially gratifying." bwin Co-CEO Norbert Teufelberger comments the research project initiated by bwin. Co-CEO Manfred Bodner adds: "The intensive collaboration between researchers on the one hand and practitioners on the other warrants that science does not conduct research without taking practical experience into account. bwin has dared to take that step and has consulted independent experts on this subject matter. Which has proven to be a good decision in all aspects."

The bwin Group has over 11 million registered customers (including 7 million "play money" customers) in over 20 core target markets. Operating under international and regional licences in countries like Gibraltar, Kahnawake (Canada), Belize and Germany, Italy, Mexico, Argentina, Austria and the United Kingdom, the Group is the number one address for sports betting, games and entertainment via digital distribution channels. The Group offers sports betting, poker, casino games, soft and skill games, as well as audio and video streams on top sporting events such as the German Soccer League. The parent company, bwin Interactive Entertainment AG, has been listed on the Vienna Stock Exchange since March 2000 (ID code "BWIN", Reuters ID code "BWIN.VI"). All details about the company can be found on its investor relations website at www.bwin.ag

press release bwin

REAL MADRID DEAL RAISES QUESTION OVER ONLINE GAMING IN SPAIN

2007-06-20T15:28:00.000Z

Spain's communications watchdog, Asociación de Usuarios de la Comunicación (AUC), has logged a formal complaint with Spain's Ministry of Economy and Taxes, demanding an investigation into online gaming company, bwin's sponsorship of Real Madrid.

Real Madrid earlier this month signed a deal to make Austrian on-line betting firm Bwin its main sponsor. The Spanish media reported the deal to be worth between €15 million and €20 million.

The AUC believes that the shirt sponsorship is breaking up to as many as eight Spanish laws which they claim make it illegal for unlicensed online gaming companies to advertise their services in Spain.

888.com’s shirt sponsorship of Seville and Miapuesta’s deal with Figueres have also caught the attention of the AUC.

sportbusiness.com

Consequences of the Ladbrokes decision

2007-06-15T14:55:00.000Z

quotation from World Online Gambling Law Report, May 2007

Ladbrokes: key guidance on restriction of services

by Martin Arendts, M.B.L.-HSG

(...)

In my view, the quintessence of the Ladbrokes decision is clearly the intensified analysis in the assessment of gambling services. Questions which recently have been regarded as purely political or which the ECJ mentioned incidentally have now come under the strict scrutiny of the judges.

The consistency test, developed by the ECJ in several decisions over the years, has now become a very detailed examination of the political aims and objectives and an explicit verification of the behaviour of the monopoly operators. The judges will now
have to address complex and discretionary issues, such as whether the advertising of the gambling and betting services is more informative than evocative in nature. National measures, aims put forward by the state or objectives are no longer sheltered from judicial review. The only exception which remains in the state’s discretion is the level of protection sought. Even then, the judges will have to decide whether the national gaming policy is indeed consistent and systematic on one hand, or whether it may be necessary to distinguish between the different games on the other hand.

The Ladbrokes as well as the Gaming Machines decisions provide for an extensive check list of questions the courts will have to answer in the affirmative in order to uphold a monopoly. Therefore, I do not comprehend why Norsk Tipping, European Lotteries as well as Deutscher Lotto- und Totoblock publicly announced that they are pleased with the Ladbrokes decision. The present legal regulations in most EEA Member States certainly do not fulfil the requirements the ECJ and the EFTA Court have set out. For example, Germany has a very inconsistent policy and no uniform level of protection. The same holds true for most other EU Member States with a gambling monopoly.

The plan to uphold a national monopoly at any cost will backfire in the long run, as judges and not politicians will have a greater say on the subject. This intensified judicial review will have a strong impact on national jurisdictions and national legislation issues. In this respect, it will certainly no longer be sufficient that a national court can simply decide that combating gambling addiction justifies any restriction of the fundamental freedoms. The State will have to demonstrate that only a monopoly will provide for a lower level of gambling addiction in society than would be the case without restrictions on free movement. The national court will have to ascertain the suitability and necessity of national measures in detail. Also the legislator will have to assess the potential risks associated with different games and decide on a uniform system of protection.

German Court Says Lottery Cartel Violates Anti-Trust Laws

2007-06-13T09:55:00.000Z

by James Kilsby, gamblingcompliance.com

The Higher Regional Court in Dusseldorf has upheld an earlier ruling of August 2006 that the Deutscher Lotto- und Totoblock's regionalised division of the German lottery market constitutes a violation of both European and German law.

The German Federal Cartel Office ruled last year that the agreement between the 16 state monopoly lottery operators in German to restrict their operations purely to their own regions to avoid entering into competition with one another represented an illegal cartel, in contravention of both German and European anti-trust laws.

Private lottery operator FLUXX AG initiated proceedings against the Deutscher Lotto- und Totoblock once the group attempted to prohibit private lottery distributors from selling various state lottery products in gas stations and other outlets throughout Germany, i.e. outside of the lottery’s state of origin and therefore effectively in competition with the products of a ‘rival’ state monopoly.

“Private operators wanted to sell products from state lottery companies that paid the highest commission but the Deutscher Lotto- und Totoblock tried to ban commercial operators,” explains leading German gaming lawyer Martin Arendts. “The court has said that under this system the monopoly operators do not compete with each other and form a cartel. It is illegal under German cartel law to agree not to compete.”

The Dusseldorf decision means that the 2006 ruling will now come into effect and private lottery companies should be free to distribute state lottery products throughout the country. Arendts believes that the verdict has even broader consequences for the German gambling industry. “This is a very fundamental decision. It almost outlaws the Deutscher Lotto- und Totoblock which is a kind of illegal organization now,” he says.

A spokesman from the Deutscher Lotto- und Totoblock was unavailable for comment yesterday although Gamblingcompliance.com understands that the group has indicated its intention to appeal the decision in the Federal Court of Justice.

In a second Detailed Opinion on the draft Interstate Lotteries Treaty proposed by the German Lander in 2006, the European Commission emphatically highlighted that the treaty renewing the states’ betting monopolies and outlawing the use of the internet for all gambling services would be illegal under European law were it to be adopted. Arendts believes that the verdict in Dusseldorf on Friday will now further increase the pressure on the 16 state Prime Ministers to discuss alternative legislation at their next scheduled meeting on June 22. “They should discuss new regulation now,” he says.

gamblingcompliance.com

bwin new main sponsor of Real Madrid

2007-06-11T12:23:00.000Z

bwin is pleased to announce a new partnership starting on 1 July 2007 as official main sponsor of Real Madrid, the top Spanish football club. The agreement has initially been concluded for a period of three seasons.

Apart from displaying the bwin logo on the jerseys of the Real Madrid team at national and international matches, the cooperation agreement also extends to extensive branding of the stadiums and Real Madrid's training ground.

The strategic decision to enter into this partnership should be seen against the background that several EU member states have yet to accept the freedom of establishment and services in the area of online gaming, despite the fact that both the European Commission and the European Court of Justice are of the opinion that the offering of online gaming is subject to the free movement of services and the freedom of establishment laid down in the Treaty on European Union. In the future, bwin will therefore be investing its available sponsoring resources in markets that have adopted an enlightened attitude to the subject of gaming regulation.

press release of bwin