Brussels stops revision of German gaming law

By Dr. Wulf Hambach, Maximilian Riege

The EU Commission continues to block the planned revision of gaming law. The first draft for a new inter-state treaty had already fallen through with a big bang and, in its reaction to the revised draft which was published on Tuesday, Brussels does not hold back with its criticism either – in spite of the diplomatic tone. “The example of Schleswig-Holstein could now become the way out of the mess”, say Wulf Hambach and Maximilian Riege.

Rhineland-Palatinate’s minister president Beck especially would have certainly welcomed a different answer from Brussels, as the ratification of the new draft for an inter-state treaty on gambling – also referred to as the “E-15 Draft” – when signed in mid-December 2011, had been made subject to a “concluding positive statement from the EU Commission” by his conservative colleagues in other federal states.

Accordingly, the pressure imposed by the E-15 representatives during their numerous trips to Brussels had been significant. However, the EU Commission was unimpressed and holds in its new statement: “On the basis of the information provided by the German authorities, the Commission services are not yet in a position to assess the extent of the problems identified or the suitability and proportionality of the measure proposed.”

The accusation that the gaming regulation lacks scientific foundation is the leitmotif of the Commission letter. At numerous points, Brussels criticises that the assumptions made by the 15 federal states cannot be verified, as scientific surveys for alleged risks and economic considerations are lacking. These are also demanded by the European Court of Justice.

No convincing bans without evidence and data

It seems that the 15 minister presidents and their gaming law advisors have failed to grasp the decisive points of the letter of warning sent by the Commission last summer. Even then, the different treatment of sports bets, online casino games and poker, the arbitrary limitation to seven sports betting licences, and the high tax rate imposed on gaming providers had been criticised.

However, the second attempt at a new regulation of gaming has not lifted the ban on online casino games and online poker. Now, twenty sports betting licenses are planned to be issued instead of the previous number of seven – the 21st interested party would be left in the lurch with its application for a betting licence, and would be discriminated against in comparison with the other twenty.

This not only constitutes a violation of the European fundamental freedoms, but furthermore is to be seen as an unjustified encroachment upon the freedom of occupation guaranteed by Art. 12 of the German Constitution, a fact pointed out only recently by the former president of the German federal constitutional court (BVerfG), Hans-Jürgen Papier, in an expertise on the new inter-state treaty on gambling. The same applies with regard to the planned taxation.

Finally, the unsubstantiated different treatment of games of chance with similar addiction potential, such as online sports bets and online poker, also constitutes a violation of the principle of a consistent and coherent gaming law regime.

Correspondingly, the EU Commission criticises above all that the legislators failed to do their homework, which would have been to provide evidence and data justifying a ban. To merely continuously keep repeating the addiction argument, without providing any kind of evidence, will not suffice, neither to justify the lottery monopoly nor the ban on online casino games and poker.

Schleswig-Holstein has done its homework

As therefore the route taken up to now by the 15 minister presidents has not led to the correct legislative answers, it would be high time to take a step in a different direction – for instance to the north: In contrast to the E-15 Draft, Schleswig-Holstein acutally can rely on “data and evidence” – with the result that Brussels’ reply to the draft from northern Germany one year ago was as brief as it was positive in conclusion.

For instance, a study by the gaming and betting research institution Bonner Forschungsinstitut für Glücksspiel und Wetten from 2011 showed that online poker does not have a higher addiction factor than online sports bets. Due to this scientific evidence, the Schleswig-Holstein expert politician for economic affairs, Hans-Jörn Arp, CDU, finds it hard to understand why the representatives of the other federal states advocate the licensing of online sports bets, whilst at the same time propagating the ban on online poker for reasons of addiction prevention. Arp says that this cannot be explained by points of logic, but probably rather had ideological reasoning behind it.

A position which the other 15 German federal states should maybe take into consideration once more – in particular as they now seem to have understood that the route taken up to now has not led in the right direction.  Jörg Bode (FDP), minister for economic affairs in Lower Saxony, for instance, said directly after the Commission’s statement was published: “The treaty in its present form has failed”.

What will the next steps be? Joining the Schleswig-Holstein regulatory model is possible at any time. The Schleswig-Holstein minister president and the parliamentary party leaders of CDU and FDP in the Kiel parliament have always emphasised that the door remains open for the other federal states to endorse the Schleswig-Holstein model. It would serve legal certainty in Germany in the area of gaming law.

Dr. Wulf Hambach is founding partner, Maximilan Riege is senior associate at the law firm Hambach & Hambach in Munich. The authors specialise inter alia in gaming law.

See German version of the article at www.lto.de/recht/hintergruende/h/gluecksspielstaatsvertrag-eu-kommission-schleswig-holstein-sportwetten/

Citation suggestion for this article:
Dr. Wulf Hambach, Maximilian Riege, Sports Bets, Online Poker & Co.: Brussels stops revision of German gaming law. In: Legal Tribune ONLINE, 21.03.2012, http://www.lto.de/persistant/a_id/5834/ (retrieved on 21 Mar. 2012)

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