31 January 2008

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

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

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

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.

30 January 2008

Multi-Channel Gambling 2008

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

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

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.

18 January 2008

EU moves toward ruling on German gambling law

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

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

06 January 2008

Liechtenstein to offer remote gaming licence?

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.