German Gambling Monopoly Challenged

0 Comments   Email   Print

After accepting the validity of the state gambling monopolies in some European nations, the European Court of Justice (ECJ) ruled in a case this week that the Germany’s monopolistic gambling laws were in contravention of European Commission regulations.

The case before the ECJ had its genesis in the cases registered in different administrative courts in Germany by online operators such as Sportwetten, Digibet and Carmen Media Group. The ECJ referred to its earlier decisions and said that the nation could impose ban on private online operators and propagate state owned gambling monopolies under European Union laws, but only when there were compelling reasons in the public interest. This was not the case with the German online gambling laws. The ECJ went on to say, "the German rules do not limit games of chance in a consistent and systematic manner." The ECJ stressed that the public interest clause could not be invoked in the case of Germany because the state owned online gambling monopolies were not behaving in a manner that could be seen to prevent gambling addiction. These operators were carrying out intensive advertising campaigns that encouraged participation in games of chance so that they could increase their profits.

The European Gaming and Betting Association (EGBA), a trade association that includes most of Europe’s biggest online gambling groups among its members, reacted positively to the judgment. Sigrid Ligne, the organization’s secretary general said, "This is a landmark ruling which will have a decisive impact on the much needed reform in Germany." However it is evident that Ligne has ignored what the ECJ has recommended. Rather than establish a regulated regime with licensed private operators competing in the online gaming market place, the ECJ asserted that state-owned monopolies were preferable provided they functioned in the public interest. The court said, "Such a monopoly is likely to overcome the risks connected with the gaming industry more effectively..." The cases involved in this ruling will be referred back to the regional Administrative Courts and it is expected that the monopolies will limit their advertising and promotion expenses.

However the matter is not that simple. Germany has prohibited private online gambling operators under the German State Gambling Treaty, which came into force on 1 January 2008. It is due to run till the end of 2011 and therefore has more than a year to go. One of the German states Schleswig-Holstein has in November 2009 demanded that the treaty be dissolved prematurely so that it can establish an intrastate licensing system. The Gibraltar based Carmen Media group has applied to Schleswig-Holstein for an online gambling license and under the present law that license cannot be issued.

News Item Tools

 Email     Print     Digg     Del.icio.us    StumbleUpon

Comments

 Add Comment

Add Comment

More News