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EUROPEAN COMMISSION DUE TO RULE ON GERMAN ONLINE GAMBLING SOON

Thursday July 14, 2011 : Next week could see more clarity on the Commission's view of Germany's new Treaty
 
European media and sources report that the European Commission will clarify its position on the proposed 'liberalisation' of the German online gambling market as soon as Monday July 18.
 
The Commission has been considering plans by 15 of Germany's 16 Länder (states) going forward following the expiration of the current monopolistic treaty that has constrained Germany's market in recent years, excluding competitors both within and from outside the country.
 
Gambling companies in Germany and in other EU nations have protested that the way forward proposed by the German state governments is overly restrictive and not in compliance with EU law or principles, and that it will do little to bring about a more open and competitive gambling market in Germany.
 
15 of the 16 German states submitted their proposals to the Commission in April after the European Court of Justice found last year that the existing arrangement, which allows only state-owned companies to offer most online sports gambling, breached EU competition rules.
 
Online gambling companies, most recently the Betfair group, have protested that the new proposals restrict the number of German licenses available to private operators to seven, and that the proposed tax of 16.67 percent on every stake is unreasonable, deliberately making participation in the German market by private companies unviable.  The proposals have been described as “disproportionate," discriminatory” and “protectionist”.
 
Sigrid Ligné, the secretary-general of the European Gaming and Betting Association (EGBA), said that the proposed changes to Germany's gambling law merely reinforced rules that made opening up access to online betting “impossible”.
 
“This is extraordinary given that Germany is already subject to infringement proceedings,” she said. “So we can only expect that the Commission will flag up the problems and act with sufficient strength.”
 
The German states hoped to have clearance of the proposals in time to introduce same in January next year.
 
The Commission's opinion carries weight, as the new regulations cannot be introduced if it is ruled that these are not compliant with EU law. To go ahead regardless would risk the states being subjected to infringement proceedings by the Commission.
 
One German state stands out in this issue, and has distanced itself from the approach adopted by the others.
 
Schleswig-Holstein has opted out of the new proposals, instead developing its own more progressive and practical open regulatory approach. These regulations, which include the availability of more licenses, have been received with more enthusiasm by the industry.
 
Michel Barnier, the head of the European Commission, is currently carrying out a review of all online gambling across the EU, and in March this year launched a consultative initiative inviting submissions by the end of July 2011.



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