State Treaty Cause for Massive Job Cuts, Tipp24 Says

03.04.2009, On Friday, Tipp24 A.G. slashed 139 out of 154 jobs -- leaving just 15 employees at its headquarters in Hamburg due to Germany's Interstate Gambling Treaty.

by Gaming Industry Media Staff

On Friday, Tipp24 A.G. slashed 139 out of 154 jobs -- leaving just 15 employees at its headquarters in Hamburg due to Germany's Interstate Gambling Treaty.

In addition to cutting much of its work force, the online lottery broker also scaled back its executive board. Petra von Strombeck and Marcus Geiß will both retire from the board on March 31, the company said in a statement.

The state treaty, which was enacted on Jan. 1, 2008, forbids Tipp24 from conducting any form of lottery brokerage online in Germany. The company has since moved operations for its www.tipp24.com Web site to London.

Jens Schumann, the company’s chairman, said that the majority of cut jobs likely will be replaced by new ones abroad.

“At the same time as the German state is spending billions to save German jobs, it is also destroying the jobs of a healthy, mid-size company with a law which contravenes E.U. legislation,” Mr. Schumann said in the company statement.

“It seems more likely that the state treaty is designed to eliminate private companies under the pretext of preventing addiction,” he added. “After all, controlling addiction would be much more effective via the Internet than at the lottery kiosk. We will therefore continue to take legal action against the new state treaty.”

Jobs at Tipp24 Entertainment GmbH were not affected by the German state treaty, the company said.

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