CJEU Ruling May Prompt German Online Betting Reforms

Home » Poker News » CJEU Ruling May Prompt German Online Betting Reforms

Wednesday, March 2nd, 2016 | Written by Stephen Smith

Gambling regulations are complex no matter which country or state is involved, but in Europe, legal matters are particularly complicated. That’s because individual nations’ laws must be in line with the prevailing laws of the European Union if the countries in question are EU member states. Recently, a court decision from the Court of Justice of the European Union (CJEU) found that a push from Germany to prosecute a sports betting operator was unlawful because it directly conflicts with EU laws. The consequences of this decision could be far reaching for sports betting in Germany.

The State of German Sports Betting

Since 2008, Germany‘s laws regarding sports betting have been dictated by the Interstate Treaty on Gambling. This law makes it illegal for private operators to solicit sports bets from the public or to offer games of chance. By passing the law, Germany essentially made it so that the government has a monopoly on gambling, as the only opportunities for sports betting and games of chances come from government-run programs. A Federal Administrative Court in Germany found that the treaty conflicted with EU laws that prevent State monopolies. In 2012, an amendment was added to the law to allow for 20 private sports betting licenses to be issued. This would have put an end to the monopoly; however, not a single license has ever been issued.

The CJEU Ruling

The ruling from the Court of Justice of the European Union was related to the case of Turkish business woman who was serving as a broker for an Austrian betting company in Bavaria, Germany. She was arrested and charged with unlawful private sports betting. The Local Court of Sonthofen called the charges into question, doubting the legality of a conviction, so the matter was turned over to the Court of Justice of the European Union.

After studying the details of the case, the Court of Justice of the European Union found in favor of Sebat Ince, the woman facing prosecution. The court stated that because Germany had never issued a single sports betting license, the state still had an unlawful monopoly on sports betting. Basically, the court ruled that since neither Ince nor any other Germany Resit could apply for a gambling license, the German government cannot prosecute people for accepting sports bets without them.

What the Decision Means

The Court of Justice of the European Union deals a serious blow to Germany’s ability to prosecute private entities for sports betting. It will no longer be possible for the government to stop German citizens from brokering bets from licensed sports betting operators that are located in other EU nations simply because they lack a license. Germany will be forced to begin issuing those licenses to private operators if they want to be able to enforce the treaty.

There is some belief that the Court of Justice of the European Union decision will also make it impossible for Germany to block online casino games and online poker sites that are run by licensed operators from other EU nations, but only time will tell if that will be the case.

Will Germany Now Changes Its Course?

Following the CJEU ruling, the European Gaming & Betting Association (EGBA) weighed in on the issue and asserted that the European Commission should now take a hand in ensuring Germany begins reforming its online betting rules. According to EGBA secretary general Maarten Haijer, as matters stand EU law is not being enforced by Germany, and so the European Commission should now ensure the country abandons its failed interstate treaty by opening an infringement case against it. This could then prompt Germany to prepare a comprehensive reconsidered legal framework more suited for the 21st century, thus paving the way for German consumers to access a regulated and competitive online gaming environment protected by German legislation.

French lawyer and gaming industry expert Diane Mullenex also sees the recent CJEU ruling as extremely positive, and now believes Germany will be compelled to move forward in setting up an appropriate regulated iGaming industry.

“As Germany is one of the largest markets in Europe, operators and providers of gaming services have high hopes that a proper infringement case will be opened against Germany by the European Commission,” explained Mullenex. “Similar circumstances have pushed France to regulate, although such regulations are now seen to be rather uncompetitive and strenuous both from the compliance point of view and the tax rate. This is probably why stakeholders are pushing for regulations similar to those that apply in Denmark; expecting the worst and hoping for the best.”