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GERMANS STALL GAMBLING TREATY RULING

Friday June 10,2011 : Schleswig-Holstein already has a solution, but other lander appear reluctant to adopt it.
 
The end of a highly restrictive and monopolistic German land and online gambling regime  may be in sight....but the final decision has been postponed until October this year and will in part depend on the position taken by the European Commission on new German proposals.
 
Leaders of the 16 German states, or lander, that control the market through the soon-to-expire State Gambling Treaty, met this week in Berlin but were unable to agree on a final solution, postponing the decision to later in the year.
 
It is known that some states, and Schleswig-Holstein in particular, favour a more enlightened policy. The Schleswig-Holstein proposal for its individual state policy, which has received the approval of the European Commission, allows for the licensing of online gambling private operators in general.
 
Licensed operators would pay a 20 percent tax on gross profits and be properly regulated in an approach that has been widely applauded in the online industry.
 
The current situation regarding the overall Treaty is that - subject to a EC green light scheduled for mid-July - in the interim individual lander may be able to action a restricted opening of online sports betting involving private operators, although the heavy 16.6 percent tax on turnover is unlikely to be appealing (see previous InfoPowa reports).
 
Online gambling group Betfair gave the 16 state premiers food for thought by releasing a report it had commissioned from German law expert Bernd Grzeszick of the University of Heidelberg this week.  In his report, the German academic opines that the draft proposal submitted to the EC is unlikely to win approval, mainly because its provisions are not applied in "a consistent and systematic manner as required by the European Court of Justice.”
 
Releasing the report, a Betfair spokesman observed: “We are hopeful that the prime ministers use the remaining time available to them to agree on a legally watertight treaty that provides reputable private companies a fair market opportunity and protects German consumers against an uncontrolled black market.”
 
The spokesman added that Schleswig-Holstein has already obtained European Commission approval for its more open approach to online gambling regulation, and expressed the hope that other German lander would follow suit.
 
Meanwhile, the H2 Gambling Consultancy predicted that an overly-restrictive approach to German sports betting as proposed in the draft submitted to the EC could backfire on the German lander, as it would be unlikely to garner more than 7 percent of the widespread online gambling already taking place in the market.



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