July 19, 2011

EC Raises Doubts Over German Gambling Law

The European Commission has raised serious doubts over the compatibility of Germany’s draft gambling law with the country’s 16 Länder now forced to rectify their proposals or face EC infringement proceedings – a move welcomed by a number of operators that generate significant revenue there.

Martin Cruddace, Betfair’s chief legal and regulatory affairs officer, said he was “pleased and encouraged” to learn that the European Commission shares the same opinion [as Betfair] and added that from the outset it was “clear” that the proposals put forward by the German Länder were “discriminatory, anti-competitive and therefore incompatible with EU law”.

“Although the federal states claim to be opening up the market for sports betting, the current draft treaty contained a raft of protectionist measures designed to keep private online operators out of the market.

“We now expect the German draft law to be amended so that it genuinely caters for a competitive online gambling market in Germany, and will subsequently ensure the highest standards of value, integrity and security for German consumers.

“As a responsible operator committed to transparency and integrity, Betfair hopes to obtain a licence in the newly regulated German market, and we view today’s action from the Commission as a significant step towards us achieving this goal,” he added.

In June German’s federal prime ministers said they would delay their decision on the new State Gambling Treaty until October, when they hope to have a framework agreed upon by all 16 German federal states or Länder.

The delay was meant to allow the Länder to incorporate the decision of the EC on the compliance with EU law of their proposals, revealed in April, for a restrictive opening of the online sports betting market to private operators based on a 16.66% turnover tax. Following the EC’s findings, however, this could now be in doubt.

In the same month Betfair-commissioned research published by leading German law professor Professor Bernd Grzeszick of the University of Heidelberg that found the present notified draft would “fail in any assessment by the ECJ as well as in national courts”, as it does not restrict operators’ rights to offer services in the territory enshrined in Articles of 49 and 56 of the EU Treaty “in a consistent and systematic manner as required by the ECJ.”

Leading gambling data business H2 Gambling Capital has also projected a regulated market in Germany would only capture 7% of total egaming activity in the territory should it proceed with the restrictive opening for sports betting proposed in April.

No comments:

Post a Comment