German Gambling Laws under the Microscope of the European Commission

The European Commission (EC) has joined the number of critics of the stalled iGaming regime in Germany. The online gambling laws in the state under the revised State Treaty on Gambling in 2012 were put under the microscope by the Commission via the EU pilot scheme introduced in 2008, a program through which the EC can communicate its concerns to EU member states on possible violations of the laws of the European Union.

EC Formally Rebukes German Betting Laws

A month ago, the European Commission formally rebuked the 3 year-old interstate gambling treaty of Germany. About a year ago the European country gave out 20 federal online sports betting licenses but they were legally challenged by the rejected applicants and this prevented any of the licenses from taking effect.

The inability to launch is not the only criticism from the EC in its shaming letter to Germany’s gambling authorities. The Commission also criticized the lack of transparency during the application process and the reasoning behind the decision of the state to restrict licensed gambling operators to sports betting but banning online casino sites and poker rooms.

Furthermore, the EC suggested that Germany’s iGaming treaty greatly failed in reducing the number of unauthorized operators which are still representing 1/3 of the online gambling industry in the state. Last but not least, the Commission challenged the country to show proof that it has reduced the rates of problem gambling and illegal gambling activities such as money laundering.

Member states that are part of the EU pilot system have ten weeks to reply so Germany will be under pressure to respond by September 17th 2015. Afterwards, the EC has 10 more weeks to review the situation and decide on further steps. If nothing positive comes out, the matter will likely be taken to the European Court of Justice under an EC violation procedure.

State-owned Oddset Perhaps Given Preferential Treatment

The Administrative Court of Hamburg backed the opinions of the Court of Frankfurt and Wiesbaden which believe that the licensing application process in Germany is flawed. The Court of Hamburg also noted that one of the approved 20 licenses is perhaps given a preferential treatment by the Minister of the Interior and Sport for the German state of Hesse, Peter Beuth.

The name of the operator wasn’t said but it is widely believed that it is ODS Oddset Deutschland, the biggest state owned sports betting monopoly. The Court said that this operator has been “fast tracked” through the licensing process even though there is no clear justification for doing so. In response, Peter Beuth said that the current legalization is not capable of achieving its objectives and added that Germany should change the law.

Last fall, the Bavaria Court also challenged the way Oddset received its license, nothing that the law in Germany prohibits sports betting operators from being connected to sporting bodies. The shareholders of this operator include 13 of Germany’s 16 lottery monopolies which are connected to German sports federations.