UK TRADE BODY HAS RESERVATIONS ON GERMAN GAMBLING PROPOSALS

Friday, October 28, 2011 : RGA disappointed that there is still no market-based and consistent regulation for the State Treaty on Gambling in Germany in sight.
 
One of the most powerful trade associations in the online gambling industry, numbering many of the major UK corporates among its members, has expressed deep disappointment  at the lack of progress on a properly regulated and competitive market in Germany, pointing to the state of Schleswig Holstein as the only EU-compatible and secure legal regulatory regime in the country.
 
The latest German Treaty proposals have clearly not met with the Remote Gambling Association's expectations for a competitive German gambling market for private remote gambling operators and consumers.
 
The Association issued a press release on the issue Friday, following a statement by the Minister Presidents of the German Lander (states) urging the adoption of a State Treaty which, in the RGA's words, "does little to regulate remote gambling."
 
In particular, the RGA questions the intention of the Lander, by July 2012, to introduce a system that:
 
*     Limits operator licence numbers;
 
*     Would see the adoption of a wholly uncompetitive turnover tax regime; and
 
*     An outright prohibition of casino and poker online games.
 
This is out of line with the more measured and rational approach taken in other European Union Member States, such as Denmark and Spain, who are soon to introduce systems that regulate nearly all forms of remote gambling and which are based on a much more viable gross profits taxation model, the Association points out. 
 
“There appears to be no connection between the desire to provide German citizens with a regulated market and the actual text of the State Treaty," said Clive Hawkswood, chief executive of the RGA. "The Minister Presidents say on one hand that they want to encourage sports betting with regulated German operators, but at the same time deny this to citizens who wish to partake of casino and poker games online.
 
“It is clear that this will have little effect in reducing the large number of German citizens gambling with operators licensed in other jurisdictions and which offer casino and poker products. Policies to restrict consumers from accessing such sites have consistently been shown to be ineffective. As such, this policy will have limited practical impact.”
 
The current draft State Treaty calls for a limit of 20 licences and a 5 percent tax on turnover (a taxation basis that has failed in Member States like France); severe limits on betting amounts (for example, there is a suggested limit of Euro 1,000 a month); a prohibition on casino and poker games; and a prohibition on live betting.
 
In contrast, the German Land of Schleswig-Holstein passed its own online gambling law earlier this year, which regulates all gambling products on a gross profits basis, and has the approval of the European Commission.
 
Hawkswood concluded: “The European Commission has repeatedly stated that the draft State Treaty falls foul of EU law, and the latest version appears to make little headway in meeting the Commission’s concerns. In fact, such an approach simply makes the Schleswig-Holstein proposal more attractive and creates a fragmented, confusing and undesirable situation for German consumers.”