Question to the European Commission with regard to the Interstate Treaty on Gambling

Question for written answer to the Commission Rule 130 John Stuart Agnew (EFDD)

Subject:  Germany's Interstate Treaty on Gambling

Germany’s apparent ‘gentlemen’s agreement’ (Commission communication SG(2012) D/50777) with the Commission has protected it from an infringement procedure related to its amended Interstate Treaty on Gambling for over two years now. Under the agreement, Germany was obliged to prove the suitability of its gambling law. Although the agreement’s two-year validity period expired on 1 July 2014, no infringement procedure has been initiated to date. This means that a potentially illegal law is still in place. 1. Have other Member States been granted a gentlemen’s agreement before which delayed the initiation of an infringement procedure? 2. Does the Commission deem the amended Interstate Treaty on Gambling and its implementation to be in compliance with EC law? 3. If not, why has the Commission not taken action by means of an infringement procedure without further delay?

European Commission on the sports betting licensing procedure in Germany

Question for written answer to the Commission Rule 130 Alexander Graf Lambsdorff (ALDE)  Subject:  Modification to the German State Treaty on Gambling On 15 December 2011, all the German states apart from Schleswig-Holstein signed a modification to the State Treaty on Gambling. The most significant amendment is that private sports betting providers can obtain up to 20 concessions. Transposition of the modification took place in 2011 and 2012 with implementation laws which differed among the states. For example, as the state government of Hessen concedes in a reply to a parliamentary question, imposing the numerical restriction on concessions has proved enormously long, complicated and open to dispute. In particular, the measure to contain illegal sports betting has backfired and had the opposite effect. This is mainly because the state government has still not awarded the concessions, nearly two years after the Modification came into force. The current limbo surrounding the award procedure enables private betting providers operating illegally to function largely without regulation. The Commission gave the new Treaty a two-year trial period, which expired in July 2014. 1. What is the Commission's assessment of the implementation of the Treaty in Germany? 2. Does the tendering procedure in Hessen satisfy the principle of equal opportunity and transparency, and is it compatible with European law? 3. Does the Commission intend to initiate infringement proceedings against Germany as a result of the situation surrounding the award procedure? _____ Parliamentary questions
11 March 2015	P-000412/2015
Answer given by Ms Bieńkowska on behalf of the Commission
The Commission continues monitoring closely the implementation of the German State Treaty on Gambling. The modified regime for sport betting is part of that ongoing evaluation. The Commission is aware that the tendering procedure for the award of sport betting concessions is currently still subject to review in the national remedy system. The process of the award of sport betting concessions is considered as part of the overall assessment of whether the objectives in the public interest justifying the restrictions of the German gambling legislation are met in a consistent and systematic manner as stipulated in the case law of the Court of Justice of the European Union (see recently Case C-390/12, Pfleger, judgment of 30 April 2014 paragraph 43).

Ince case: New referral to the CJEU from Germany

Reference for a preliminary ruling from the Amtsgericht Sonthofen (Germany) lodged on 11 July 2014 — Criminal proceedings against Sebat Ince

(Case C-336/14)

 

Language of the case: German

 

Referring court

Amtsgericht Sonthofen

 

Party/parties to the main proceedings

Sebat Ince

Other party: Staatsanwaltschaft Kempten

 

Questions referred

 

I.    On the first charge (January 2012) and the second charge in so far as it relates to the period up to the end of June 2012:

 

 

1(a)    Must Article 56 TFEU be interpreted as meaning that criminal prosecution authorities are prohibited from penalising the intermediation of bets on sporting competitions carried on without German authorisation on behalf of betting organisers licensed in other Member States, where such intermediation is subject to the condition that the betting organiser too must hold a German authorisation, but the legal position under statute that is contrary to EU law (‘monopoly on sports betting’) prohibits the national authorities from issuing an authorisation to non-State-owned betting organisers?

 

1(b)    Is the answer to question 1(a) altered by the fact that, in one of the 15 German Länder which jointly established and jointly implement the State monopoly on sports betting, the State authorities maintain, in prohibition or criminal proceedings, that the statutory prohibition on the issue of an authorisation to private suppliers is not applied in the event of an application for an authorisation to operate as an organiser or intermediary in that federal Land?

 

1(c)    Must the principles of EU law, in particular the freedom to provide services, and the judgment of the Court of Justice in Case C-186/11 be interpreted as precluding a permanent prohibition or an imposition of penalties (described as ‘precautionary’) on the cross-border intermediation of bets on sporting competitions, where this is justified on the ground that it ‘was not obvious, that is to say recognisable without further examination’ to the prohibiting authority at the time of its decision that the intermediation activity fulfils all the substantive conditions of authorisation (apart from the reservation of such activities to a State monopoly)?

 

2    Must Directive 98/34/EC ¹ be interpreted as precluding the imposition of penalties for the intermediation of bets on sporting competitions via a gaming machine, without a German authorisation, on behalf of a betting organiser licensed in another EU Member State, where the interventions by the State are based on a law, not notified to the European Commission, which was adopted by an individual Land and has as its content the expired Staatsvertrag zum Glücksspielwesen (State Treaty on Gaming) (‘the GlüStV’)?

 

II.    The second charge in so far as it relates to the period from July 2012

3    Must Article 56 TFEU, the requirement of transparency, the principle of equality and the EU-law prohibition of preferential treatment be interpreted as precluding the imposition of penalties for the intermediation of bets on sporting competitions, without a German authorisation, on behalf of a betting organiser licensed in another EU Member State in a situation characterised by the Glücksspieländerungsstaatsvertrag (State Treaty amending the provisions on games of chance) (‘the GlüÄndStV’), applicable for a period of nine years and containing an ‘experimental clause for bets on sporting competitions’, which, for a period of seven years, provides for the theoretical possibility of awarding also to non-State-owned betting organisers a maximum of 20 licences, legally effective in all German Länder, as a necessary condition of authorisation to operate as an intermediary, where:

 

(a)    the licensing procedure and disputes raised in that connection are managed by the licensing authority in conjunction with the law firm which has regularly advised most of the Länder and their lottery undertakings on matters relating to the monopoly on sports betting that is contrary to EU law and represented them before the national courts in proceedings against private betting suppliers, and was entrusted with the task of representing the State authorities in the preliminary ruling proceedings in Markus Stoß [and Others, ,,,, and, EU:C:2010:504], Carmen Media [Group,, EU:C:2010:505] and Winner Wetten [, EU:C:2010:503];

 

(b)    the call for tenders for licences published in the Official Journal of the European Union on 8 August 2012 gave no details of the minimum requirements applicable to the proposals to be submitted, the content of the other declarations and evidence required or the selection of the maximum of 20 licensees, such details not having been communicated until after the expiry of the deadline for submission of tenders, in a so-called ‘information memorandum’ and numerous other documents, and only to tenderers who had qualified for the ‘second stage’ of the licensing procedure;

 

(c)    eight months after the start of the procedure, the licensing authority, contrary to the call for tenders, invites only 14 tenderers to present their social responsibility and safety policies in person, because these have fulfilled all of the minimum conditions for a licence, but, 15 months after the start of the procedure, announces that not one of the tenderers has provided ‘verifiable’ evidence that it fulfilled the minimum conditions;

 

(d)    the State-controlled tenderer ‘Ods’ (Ods Deutschland Sportwetten GmbH), consisting of a consortium of State-owned lottery companies, is one of the 14 tenderers invited to present their proposals to the licensing authority but, because of its organisational links to organisers of sporting events, is probably not eligible for a licence because the law (Paragraph 21(3) of the GlüÄndStV) requires a strict separation of active sport and the bodies organising it from the organisation and intermediation of bets on sporting competitions;

 

(e)    one of the requirements for a licence is to demonstrate ‘the lawful origin of the resources necessary to organise the intended offer of sports betting facilities’;

 

(f)    the licensing authority and the gaming board that decides on the award of licences, consisting of representatives from the Länder, do not avail themselves of the possibility of awarding licences to private betting organisers, whereas State-owned lottery undertakings are permitted to organise bets on sporting competitions, lotteries and other games of chance without a licence, and to operate and advertise them via their nationwide network of commercial betting outlets, for up to a year after the award of any licences?

  ____________

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 1998 L 204, p. 37).

Arendts on the sports betting licensing procedure in Germany

Germany: sports betting licensing procedure from Martin Arendts

German Highest Administrative Court Confirms Fantasy-League-Game Is Not Gambling

By Martin Arendts, Attorney-at-Law

The German Federal Administrative Court (Bundesverwaltungsgericht) decided that “Super-Manager”, a Fantasy-League-Game offered online, is not gambling within the sense of the German Interstate Treaty on Gaming (Glücksspielstaatsvertrag). With its decision of 16 October 2013 (file no. BVerwG 8 C 21.12), the Federal Administrative Court confirmed the appellate decision of the Baden-Wuerttemberg Administrative Court of Appeal.

The plaintiff, a media company in Berlin, offered online a Fantasy-League-Game called “Super-Manager”, based on the German Football Bundesliga. Participants had to pay a participation fee of EUR 7.99. They were then, within a fixed budget, allowed to put together a fictitious team of 18 Bundesliga players of the season 2009 - 2010. On the basis of a jury’s evaluation of the performance of the players, each Bundesliga day a new line up was submitted in three different fictitious leagues. A participant was allowed to submit a maximum of ten teams, from which every third was free of charge. The winners (top finishers) were prized with cash or other prizes. The overall winner, Super-Manager of the season 2009 - 2010, won EUR 100.000 in cash.

The Regional Authority of Karlsruhe (Regierungspräsidium Karlsruhe), acting on behalf of the State of Baden-Wuerttemberg, issued a prohibition order against the plaintiff, ordering him not to organize and not to advertise this or any other forms of gambling online. The media company filed an action against this prohibition order, but lost in the first instance. The Administrative Court of Karlsruhe rejected the arguments raised against the prohibition order. In the appellate procedure, the Baden-Wuerttemberg Administrative Court of Appeal overturned this decision and held that Super-Manager does not fall under the restrictive provisions of the German Interstate Treaty on Gambling.

The State of Baden-Wuerttemberg filed a further appeal, which was now rejected by the Federal Administrative Court. According to the Federal Administrative Court, Super-Manager is not to be classified in the sense of Section 3, Par. 1, sentence 1 Interstate Treaty on Gambling (§ 3 Abs. 1 Satz 1 GlüStV). In this provision those games are defined as gambling which depend on random chance of the gain and in which in context of the game a payment (consideration) for the acquisition of a chance of winning is required. In addition, the commitment in which the chance of winning is considered must be based on the criminal gambling term definition of gambling according to the German Criminal Code (section 284 et seq.). However it is not sufficient that a mere participation fee (admission fee) is required. With paying the participation fee, the participants obtain only the authorization for playing, without being associated with the chance of winning.

The payment for Super-Manager represents only such a participation fee. It only permits to participate in the game. It is only the composition of the team and the weekly list of the team, which is attached to the winning chance. A further interpretation of the gambling definition in the Interstate Treaty would also contradict the sense and purpose of the law and the constitutional principle of the proportionality. The far-reaching restrictions in the Interstate Treaty on gambling aims at ensuring youth protection, preventing fraud as well as gambling addiction, also channelling the population’s gambling desire to state controlled gaming operations. These are only constitutionally justified; so far their actions are suitably, necessarily and relatively strictly targeted towards these dangers. That is not the case with the games, whose danger is necessarily small and can be controlled by fewer drastic regulations. Thus it is situated after that - undisputed between the parties - statements of the Administrative Court with the Super-Manager game. In particular, the game rules did not permit the participants to at run time spend more money in expectations to compensate or adjust the suffered failures. The remaining risks can be met within the framework of the commercial law (Gewerberecht).

Sports betting licensing procedure in Germany

Arendts: Sports betting licensing procedure in Germany from Martin Arendts

Martin Arendts, Attorney-at-Law (Germany)
Intergaming Law, Issue 1 2013

The legality of online penny auctions in Germany

Online penny auctions in Germany from Martin Arendts

Martin Arendts, Attorney-at-Law (Germany)
World Online Gambling Law Report, August 2013

eGR: Demystifing Germany

Artikel demystifying germany_ma from Martin Arendts

Deutsche Telekom to enter the sports betting industry?

By Martin Arendts, Attorney-at-Law

Last Friday, the German Federal Cartel Office (Bundeskartellamt) reported the notification of an indirect acquisition of control project by Deutsche Telekom AG (file no. B6-72/13). With this notification, received on 4 September 2013 by the Federal Cartel Office, the telecommunications giant asks the authority to approve the takeover of Deutsche Sportwetten GmbH (DSW), Hannover.

DSW is a just recently founded corporation, as the articles of association were signed on 17 August 2012. It is registered at the District Court Hannover as a German limited company (registration no. HRB 208893). The establishment of this company was immediately after the public tender to grant up to 20 sports betting licenses, provided for by an “experimentation clause” in the new Interstate Treaty on Gambling 2012, was published in the Official Journal of the EU on 8 August 2012. Currently the sole shareholder of DSW, with a nominal capital of only EUR 25.000,- and two Austrian directors from Vienna, respectively Salzburg, is Österreichische Sportwetten G.m.b.H., Vienna. Österreichische Sportwetten is a subsidiary of Casinos Austria AG, which operates casinos in Austria and offers sports betting via Österreichische Sportwetten under the brand “Tipp3”.

Obviously, Deutsche Telekom AG sees chances that the up to 20 sports betting licenses will be granted soon, despite the heavily criticized licensing procedure being well behind schedule (which will eventually end up in a year-long legal battle). DSW is apparently still in the race for the 20 licenses. With the acquisition of DSW, Deutsche Telekom could ultimately secure a license, after the term of application ran out last September. Last Friday a spokesman for Deutsche Telekom conceded: “It is not yet certain, if an operative business will come out of the project.”

According to the news agency APA, the Austrians have spoken with several major German companies, with which they wanted to work together in case of a successful bid for a German license.

It is interesting to see that non-gambling companies (with huge financial resources) are trying to enter the sports betting market and are not satisfied with the role of a minority shareholder. This might change the rules of the game in the (not so) long run.

The legality of online penny auctions in Germany

The legality of online penny auctions in Germany, published in the August issue of World Online Gambling Law Report
http://www.linkedin.com/groups/legality-online-penny-auctions-in-3800534.S.270272174?view=&gid=3800534&item=ANET%3AS%3A270272174&trk=NUS_RITM-title

Schleswig-Holstein: new gambling law

Woglr september 2012 from Martin Arendts

Arendts, Cancellation of the trademark "TOTO"

Arendts cancellation toto from Martin Arendts

Arendts: Germany’s new gambling advertising guidelines

Arendts woglr february 2013 from Martin Arendts

AGM of Tipp24 SE votes in favour of UK relocation

Key step in strategic move towards international business

(Hamburg, 28 June 2013) At the Annual General Meeting of Tipp24 SE, a large majority of shareholders voted in favour of relocating the company's registered office to the UK. 97.4 percent of represented share capital followed the corresponding recommendation of the company's Executive Board and Supervisory Board. The shareholders thus laid the foundation for the company's further international expansion, which will be driven from its future base in London. Tipp24 SE is the first listed German company to relocate its registered office to another European country.

Dr Hans Cornehl, CEO of Tipp24 SE, stated:

'The vote in favour of moving our head office to the UK paves the way for the accelerated international expansion of Tipp24 SE. It creates ideal conditions for the further development of our company going forward. The UK is recognised as being the European centre of the online gaming industry and offers an excellent environment for future profitable growth. We will now swiftly initiate the next formal steps for our relocation in order to complete the process in the second half of the current year. I would like to thank our shareholders, who once again supported a landmark decision for Tipp24 SE with an overwhelming majority.'

The relocation of the company's registered office is a logical consequence of the strategic realignment of Tipp24 SE. It will focus in future on its international business, mainly in the UK and North America, which it plans to develop from its future base in the UK. The company intends to maintain its legal form as an SE after the relocation and also retain its listing in the Prime Standard segment of the Frankfurt Stock Exchange. The company's Executive Board and Supervisory Board will maintain their functions, whereby the Executive Board will work primarily in the UK in future. The current holding company functions in Germany are to be gradually relocated to the UK over a longer period and in a socially compatible manner.

Today's AGM also saw Andreas de Maizière, Oliver Jaster and Jens Schumann confirmed as members of the Supervisory Board. Thorsten Hehl, Bernd Schiphorst and Peter Steiner were elected as new members of the Supervisory Board. All other resolutions on the agenda were also accepted by the shareholders with large majorities. Approximately 54.3 percent of voting capital was represented at the AGM

About Tipp24 SE: Tipp24 SE was founded in September 1999 and holds equity interests in a number of companies in Spain and the UK, which enable participation in lottery-based games via the Internet, especially via the websites www.ventura24.es, www.mylotto24.co.uk, www.tipp24.com and www.geosweep.com. From its foundation to the end of 2008, Tipp24 SE brokered tickets worth over 1.5 billion euros to the state lottery companies - in the latter years over 330 million euros annually. Following its successful IPO in 2005 (Prime Standard), the company was admitted to the SDAX index in June 2009. In July 2012, German online brokerage activities were successfully spun off from Tipp24 SE in the form of the company Lotto24 AG, which is listed separately on the stock exchange. With the acquisition of a stake in the UK-based company Geonomics Global Games Limited in December 2012, Tipp24 SE laid the foundation for the expansion of its international business.

Press contact:
Tipp24 SE
Andrea Fratini, Head of Media and Public Relations
Tel.: +49 (0)40 32 55 33 660
E-Mail: presse@tipp24.de
Internet: www.tipp24-se.de/press/

One year of the amended Interstate Treaty on Gambling in Germany: restrictive market opening looks set to fail

Press release of EGBA

 

Brussels, 28 June 2013 - One year after the commencement of the First Amendment to the Interstate Treaty on Gambling (1st GlüÄndStV), the restricted market opening for sports betting in Germany is still to get off the ground. This confirms the concerns of Europe's leading gaming companies and the European Commission concerning the German regulation and its implementation.
 

The amended Interstate Treaty on Gambling entered into force on 1st July 2012 and heralded the reformation of gambling in Germany after the European Court of Justice (ECJ) declared that the German regulation infringed upon European law in 2010. According to the Treaty, the market is only open to 20 sports betting providers for a period of seven years. In doing this, the Treaty aims to channel the black market and combat gambling addiction.

 

The European Commission was prompt to express concerns about the German regulation, particularly in relation to the problematic limitation of providers and the Treaty's lack of consideration of online poker and casino games. The Commission fails to see how a restriction of the overall number of licenses is a suitable means to achieve the goals set (see notification of Interstate Treaty on Gambling 2011/0188/D). In combination with the narrow boundaries imposed on the organisation of sports betting, the limitation makes it extremely difficult to provide an attractive (online) sports betting offer in Germany.

 

These concerns of the Commission now seem to be confirmed: One year after coming into effect, the new regulation on sports betting has proved unsuccessful, and one year of the seven-year open period has already elapsed without any sports betting providers being admitted to the market. The procedure selected by federal state leaders to issue the 20 sports betting licenses does not meet European requirements: it has failed to provide candidates with clear, transparent and reliable information concerning the tender criteria to be used. This has led to numerous lawsuits by providers and several postponements of licence awards by the administration. It remains unclear when exactly the licenses will be granted, and even the authorities expect up to 80 proceedings, involving both unsuccessful applicants and licence holders. In addition, online poker and casino providers are not part of the limited market opening, despite the fact that this segment constitutes a much larger market portion than sports betting.

 

Maarten Haijer, General Secretary of the EGBA, states, 'Numerous questions concerning sports betting remain unanswered in Germany, despite the fact that the tender procedure has been running for months. Even if the allocation is successful, it will result in a market regulation that will bring disadvantages for everyone involved - not only the providers and authorities but also amateur and professional sports and the advertising sector, which are closely dependent on betting providers.'

 

The sluggish licence allocation shows just how problematic the chosen regulatory model is. The EGBA believes that the Commission's concerns can only be resolved if the regulatory approach is completely revised or the tender procedure is started again. In any case, the German regulation stands as a lone model in Europe. In other European countries providers are admitted to the market based on a comprehensive catalogue of criteria. Moreover, the betting licence procedure practised in Schleswig-Holstein since 2011 presents an example of successful regulation within Germany itself: there, licences are only granted to providers who can prove their fulfilment of high reliability, quality, profitability and safety criteria. These procedures have proven their success in practice and have not led to any of the delays or legal battles witnessed in Germany.

 

Maarten Haijer concludes: 'Germany is a prime example of how a political compromise that no one wishes to disavow can create a very poor procedure. For our members who are active throughout Europe, the German approach is simply incomprehensible against the background of successful European regulations and the continued existence of concerns in terms of European law.'

 

In light of the procedural problems in the granting of licences, the achievement of the political aims of channelling the black market and combating gambling addiction has been pushed into the background. The European Commission is planning an intensive evaluation of the German regulation as part of an inspection of the Interstate Gambling Treaty by 2014. The procedure used to issue licences is expected to be the subject of the evaluation.

 

German customers have the right to receive an efficiently regulated offer that meets their demand for digital entertainment and avoid consumer need to online gamble in Asia. To support fact based policy making and make available its experience to national policy makers and other stakeholders, EGBA will very soon establish a Berlin Branch to represent the online industry.

About EGBA

The European Gaming and Betting Association (EGBA) is the industry association for the online gambling and betting providers Bet-at-home.com, bwin.party, Betclic, Digibet, Expekt and Unibet, which are registered, licensed and regulated in the European Union. The EGBA advocates a consistent online betting and gambling market regulated by fair competition in accordance with EU law. The EGBA firmly believes that such a regulated market should be based on upholding public order and safeguarding consumer interests whilst corresponding to the cross-border character of the online market. www.egba.eu