International Law

NEW GERMAN GAMING LAW IN VIOLATION WITH EU LAW

By Karel.Frielink

State monopolies granted exclusivity

New gaming/gambling legislation entered into force in Germany on 1 January 2008. Although one would expect Germany to observe the laws and regulations of the European Community, it confirmed the country’s state monopolies on lotteries and sports betting and, despite several judgments of the Court of Justice of the EU (e.g. Placanica at al.), outlawed any other online gambling from both foreign and domestic sources.

Also, it is forbidden to place a bet from a computer in Germany with an operator outside Germany with its server outside Germany too. In other words: it is illegal for Germans while being in Germany to participate through their computer in on-line gaming and gambling abroad, even despite the fact that the foreign operator is fully licensed and subject to supervision in its home country, including other EU countries! So, what?s left of the EU and the WWW (World Wide Web)?

The validity of the new German legislation will be contested in court. It is now for the German courts to determine whether, in so far as German legislation limits the number of operators active in the betting and gaming sector, it genuinely contributes to the objective of preventing the exploitation of activities in that sector for criminal or fraudulent purposes. National legislation which prohibits the pursuit of the activities of collecting, taking, booking and forwarding offers of bets, in particular bets on sporting events, without a license or a police authorization issued by the Member State concerned, constitutes a restriction on the freedom of establishment and the freedom to provide services, provided for in Articles 43 EC and 49 EC respectively.

In my opinion, the articles 43 EC and 49 EC must be interpreted as precluding national legislation, which excludes from the betting and gaming sector any and all not State-owned operators. Refusing to grant licenses or authorizations to others than State-owned operators is in violation with Community law.

Not only the gaming (gambling, betting) laws of Germany are in violation with European law, so are the laws of The Netherlands. The European Commission urged The Netherlands to amend its legislation to legalize internet gambling, but up to now the Dutch government refuses to do so. It only allows State-organized organizations to offer such services and thus does not allow any competition. The Dutch government should open its borders. The question is not if but when those monopolies will be broken.

Karel Frielink
Attorney (Lawyer) / Partner

Full post as published by Karel's Legal Blog on January 08, 2008 (boomark / email).