EGBA: Serious doubts about the compliance of German gambling regime

09.12.2012, Online gaming and betting: Commission raises serious doubts about the compliance of German gambling regime with EU law

Brussels: EU online gambling operators welcome the European Commission’s ‘detailed opinion’ against the Draft Act amending acts pertaining to gambling law of the land of Schleswig-Holstein (Gaming Amendment Act S-H) which is seeking to replace its existing legislation with the controversial German State Treaty on gambling (GST). The detailed opinion confirms that there are real concerns with Schleswig-Holstein’s proposed switch from a transparent licensing model to one that is restrictive and opaque, raising further doubts about the overall compliance and consistency of the German gambling regime with EU law. Under Directive 98/34/EC, Schleswig-Holstein must not adopt its draft legislation before January 2013.

Schleswig-Holstein notified its proposed legislation to the Commission on 6 September 2012 (see link). Today’s detailed opinion (see link), which has also received the support (see link) of Malta (detailed opinion) and the U.K (comments), extends the standstill period until 7 January 2013. The proposed alignment of Schleswig-Holstein’s gambling legislation with the GST marks an abrupt policy reversal. If confirmed, Schleswig-Holstein would move from a sustainable and EU-compliant licensing model introduced in 2011 (see link) to a prohibitive and restrictive model which bans online poker and casino, imposes an uncompetitive tax regime, and restricts the online sports betting offering to 20 licenses.

Sigrid Ligné, Secretary General of the EGBA, commented: “Schleswig-Holstein’s proposed move from a sustainable and EU compliant licensing system to an inconsistent and unjustifiably restrictive regime would be a significant step backwards, one that - as confirmed today - the European Commission cannot approve”. The European Commission already confirmed its concerns about the non-compliance of the German gambling legislation with EU law in July 2011 (see link). Today’s detailed opinion shows the consistent position of the Commission towards Germany’s gambling reform.

The tendering procedure for the allocation of the 20 online betting concessions under the GST is currently managed by the state of Hessen and has already resulted in more than 100 applications but fails to provide the applicants with clear, transparent and reliable information on the criteria which will be used for allocating the 20 concessions.

Sigrid Ligné added “The European Commission’s detailed opinion against Schleswig- Holstein sends a clear message that Member States are no longer going to be allowed to impose gaming regulations that fail to meet the tests set by the CJEU. The German states cannot continue to ignore the warnings coming from Brussels and the growing criticism evidenced by the multiplication of complaints and litigation even before the new legislation is introduced. This creates an extreme level of legal uncertainty which is a damaging for all parties and German consumers in particular. At this stage, only the EC can restore legal security by acting on the many complaints it has received, not only against Germany, but also against Greece, Belgium and several other Member States.” The European Commission confirmed on 23 October 2012 in its Communication on online gambling that “ensuring compliance of national law with the Treaty is […] a prerequisite of a successful EU policy on online gambling”1 and that it would take action against all Member States whose legislation does not comply with EU law.

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For further information or comment please contact: Sigrid Ligné: +32 2 554 08 90 sigrid.ligne@egba.eu

Note to editors: The EC notification procedure Under Directive 98/34/EC, Member States must notify to the European Commission and other Member States draft regulations regarding products and Information Society services such as online gaming and betting, before adopting them. This procedure is aimed at preventing Member States from creating new barriers to the internal market freedoms by giving the opportunity to the Commission and Member States to evaluate the content of a draft law before it is adopted.

The notification of a text to the Commission opens a three month standstill period during which the draft text must not be adopted. This period allows the Commission and Member States to ascertain whether the draft text presents any unjustified barriers to the internal market. The Commission and/or Member States may then issue: • a detailed opinion, if they consider that the draft text would, if implemented, create barriers to trade, services or establishment within the EU; • comments, if they consider that the text raises issues of interpretation or requires further details; or • no response, if they consider that the text is compatible with EU law.

A detailed opinion attempts to prevent Members States from adopting a text, which contains barriers to the internal market, or to urge them to remove the restrictive provisions, thereby avoiding unnecessary legislative work and future EU infringement proceedings. Once a detailed opinion had been issued, the standstill period, during which the draft text must not be adopted, is extended by one month. If, after this time, the draft text is adopted without modification, the Commission can immediately commence an infringement procedure against the Member State’s newly adopted legislation.

To access the TRIS database and search for other draft laws see: http://ec.europa.eu/enterprise/tris/pisa/app/search/index.cfm?lang=EN

About EGBA The EGBA is an association of leading European gaming and betting operators Bet-at- home.com, BetClic, bwinparty, Digibet, Expekt, Interwetten, and Unibet. EGBA is a Brussels-based non-profit association. It promotes the right of private gaming and betting operators that are regulated and licensed in one Member State to a fair market access throughout the European Union. Online gaming and betting is a fast growing market, but will remain for the next decades a limited part of the overall European gaming market in which the traditional land based offer is expected to grow from € 71.9 Billion GGR in 2010 to € 79 Billion GGR in 2015, thus keeping the lion’s share with 86% of the market. Source: H2 Gambling Capital, September 2011. 1 European Commission Communication “Towards a comprehensive European framework on online gambling”, page 5

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