2016 – the decisive year for the Inter-State Treaty on Gambling (GlüStV)

By Dr. Wulf Hambach, Co-Founder Hambach & Hambach law firm

In mid-January 2016, a new initiative in the area of gambling policy by the Green coalition party in Schleswig-Holstein caught attention. A press release published by the parliamentary party of the Green party in the SH state parliament advocates the abolition of the ineffective ban on online gambling, asking all federal states to take up on a more realistic regulation of gambling using the modelfrom the federal state of Hesse. Attempts at revising online gambling in Germany are not entirely new. The headwind whichusually is to be anticipated for such initiatives in the field of law politics in Germany is massive, and may even tear apart acts orentire gambling supervisory authorities – as can be seen when looking at the example of Schleswig-Holstein. The reason for this: Thepower nodes for the maintenance of the gambling monopoly – namely the Deutsche Lotto- und Totoblock and its permanent advisersand experts – have established a powerful organisation; opponents among their own ranks are roped back in with a great deal ofpatience – as in the case of Hesse. In mid-January 2016, the time had come yet again to reject calls for an adjustment of Germangambling legislation.

However: How can you argue for the maintenance of the status quo, i.e. the GlüStV, if the problems are in the tooth roots and these are so badly damaged due to negligent treatment that the tooth may have to be pulled?

The deep-rooted problem – which the advocates of the GlüStV have been denying – is buried in European law. The probability that the tooth may now have to be pulled and the GlüStV restored entirely in emergency surgery, is high: The EU Commission is obviously just round the corner with infringement proceedings, the European Court of Justice, based on the Advocate General’s opinion, will probably decide that the GlüStV violates EU law, the administrative court (VG) of Wiesbaden which is responsible for the proceedings regarding sports betting licenses will reach the same conclusions in the main proceedings as in the summary proceedings, i.e. it will decide that the GlüStV violates EU law. In 2016, Hesse with its CDU/Green party government will follow its mandate and implement the coalition greement, namely to “restore” the GlüStV in the light of European law. Similar political agreement across party borders has up to now only been known from the CDU and FDP in SH. Other federal states where CDU, Green party or FDP are voted into the government in 2016 may take up on the Hesse reform clause. So, coming back to the question: What organisational measures is the Deutsche Lottoblock taking in order to once more destroy these reform attempts with strong headwinds?

In mid January, the responsible experts and representatives of the state lottery companies reconvened – armed with as many as three expert opinions and the former head of the Hamburg government, Ole von Beust.

Conclusion: The GlüStV complies with EU law after all, states Prof. Dr. Ulrich Halter, University of Freiburg and “the doubts regarding compliance with EU law of the German lottery monopoly are unfounded.” Haltern suggests a line of argumentation which goes beyond the current restriction to market aspects – gambling addiction, black markets and associated crime are market imperfections. Another aspect which is at least similarly decisive is the deep rooting of German lottery legislation in historically developed, religiously founded and morally and culturally justified attitudes and decisions in society. He believes that the European Court of Justice (ECJ) is very open to this and extends an invitation to follow this line of argumentation; this invitation now merely has to be accepted. “If one finally talked about these social aspects of legislation, it would become a lot more obvious how much social legitimation and legal justification the German monopoly has.” Moreover, games such as online poker, live bets, but also social games with the character-istics of games of chance are too dangerous and should continue to be prohibited.

Therefore: Online players in Germany, in contrast to those in France, Spain or Denmark, should snap shut their laptops and block their smartphones for online games and flee from the uncontrollable gambling addiction, if possible to the dear old lottery counter. “May I have a lottery ticket and a bar of chocolate, please.” This would be the purest form of channelling the gaming instinct for the common good! Also, legal remedies should be excluded for European providers: No Higher Administrative Court (VGH) of Hesse, no ECJ, no complaints to the EU Commission – the purest form of legal concord!

Coming back to the request by the Green party for the abolition of ineffective bans on online games and the Hesse model which does not provide for a limitation of the number of online gaming licenses or products, but rather a qualitative selection of online gaming providers using strict but up-to-date criteria: This qualitative approach has real chances in 2016, as a digital generation (digital nature) has long since grown up that uses digital social networks where people also play against each other-whether in the form of eSport tournaments, ePoker tournaments or virtual football manager games (Daily Fantasy Sports). EU member states with a future-oriented regulation of online games are already dealing with new hybrid gaming and finance platforms (e.g. binary slots) or 3D casino games. This is the reality! What is left to be done is to define the correct rules of the game – the Green party, CDU but as a matter of course also the FDP will probably see to that in the near future. On 25 February, the largest internet industry association in Europe, eco, will discuss new options of online gaming legislation across party borders, with state and federal politicians as well as domestic and foreign experts.

The GlüStV will certainly be beyond recognition after the pending treatment. Gaming rules oriented towards consumer protection may even be taken from the consumer protection code of the DVTM media association which was passed 2015, and which is supported by renowned consumer protection groups.

And: State-run lottery companies should not fear the abolition of ineffective bans with a simultaneous introduction of technically appropriate gaming rules. A peaceful coexistence of state-run and private providers would not be entirely new – in particular in Europe. So: Be brave!