GamingIntelligence: Latest German court ruling offers protection to online gamblers

Published on GamingIntelligence.com

Germany’s controversial State Treaty on Gambling has suffered yet another blow after a court ruled that authorities may not prosecute players for gambling on unlicensed sites.

Last week’s decision overturns the original ruling by the Munich Regional Criminal Court, which had said that Section 285 of the German Criminal Code (Strafgesetzbuch) could be interpreted to mean that no individual may be involved in illegal public gambling.

This was seen to set a precedent under which online casino and poker players could be prosecuted, as the State Treaty prohibits these activities.

The case centred around a 25 year-old painter and decorator who had gambled on a Gibraltar-licensed casino site, winning €201,500 between July and August 2011. He had argued that he believed online gambling to be legal as it was promoted by partnerships between celebrities or sports clubs and operators, but this argument was dismissed by the original judge.

However, that ruling has now been overturned on appeal by the Higher Criminal Court of Munich, largely due to his defence team proving that the complex legal situation in Germany effectively makes the law unenforceable.

Claus Hambach of Hambach & Hambach Rechtsanwälte, who served on the defendant’s legal team, said that all involved in the case “were lacking relevant information about the complex legal situation in Germany”.

“[The case] was being fought by normal criminal lawyers against a normal criminal prosecutor, all of whom were dealing with a gambling-related case for the first time,” Hambach told Gaming Intelligence. “For everybody this was a new issue.”

He explained that as a result of the “incoherent” German gambling legislation, his first-line argument that the law could not be enforced due to the ongoing uncertainty was accepted by the judge.

This meant that further examination of the law, such as whether it is in breach of European Union law or German constitutional law, was not considered. Had this been considered and Hambach’s arguments accepted, it could have added to the growing number of legal opinions that the legislation is simply unenforceable.

“The German gambling regulations are in chaos,” Hambach said. “So all in all we were successful with our first argument, and of course we would have liked to know what the court thinks of the legal chaos, but the judge was already accepting the first line of argument.”

Hambach also highlighted the fact that the prosecutor in the case had contacted investigating police officers to ask whether participating in unlicensed gambling was illegal or not. This, he said, showed that the court’s original ruling could not stand up to scrutiny.

“If the prosecutor didn’t know, how was the player supposed to know?”

Fellow partner of Hambach & Hambach, Wulf Hambach, added that the appeal further showed just how ineffective the current German regulatory model is.

“We are obviously of the opinion that consistent, enforceable laws must be introduced,” said Wulf Hambach. “Players need protection.”

While there has been little appetite among the majority of Germany’s 16 states to make sweeping changes to the country’s gambling legislation, Hambach remains optimistic about the prospect of a total overhaul. He points to the fact that Hesse, the state responsible for awarding the original 20 sports betting licences set out in the State Treaty, has refused to compromise on any solution that does not include casino and poker regulation.

“At a conference of Germany’s Minister Presidents in mid-July we saw many make a last-ditch attempt to secure a compromise,” he explained. “They wanted to lift the cap on sports betting licences while continuing the casino and poker ban.

“But Hesse stayed firm, and refused to concede on its demands for EU-compliant regulation with legal casino and poker.”

Hambach adds that there is now growing consensus in other states that the “quality over quantity” approach to licensing promoted by Hesse is the right model, with Christian Democratic Unionist politicians in Germany increasingly supportive of the proposal.