German banning decision postponed

[jetset]

GERMAN DECISION ON ONLINE GAMBLING BAN POSTPONED

Unanimous decision proved elusive for 16 state premiers

Premiers from the 16 German states (provinces) were unable to reach unanimous agreement yesterday (Wednesday) on proposed laws to protect state gambling monopolies by banning online gambling in the country.

The heads of the individual German states met to discuss the ban, which would have to be approved by the federal parliament. Three German states - Bavaria, Saxony and Hesse - have already introduced state laws. Most of the German states run lucrative monopolistic lotteries and are keen to protect these revenues, according to the German newspaper Handelsblatt.

If Germany were to deny access to its gamblers on protectionism grounds, it could find itself at odds with the European Commission, which is fighting to liberalise the European gambling market, but faces opposition from local and national governments who want to preserve state lottery and gambling monopolies.

The three south German states that have outlawed online gambling were doing so because they decided that an Austrian public company, Bwin Interactive, infringed their monopolistic law by not acting with their authority.

Bwin welcomed the postponement. “This decision is a very sensible one,” said Steffen Pfennigwerth, owner of Bwin in Germany, a 50 percent joint venture with Austria's Bwin Interactive. “The states will now have sufficient time to develop a legal framework for the German betting market in accordance with European law and the constitution," he said.

Bwin has been active in the campaign to liberalise European gambling, carrying out education initiatives and laying a complaint against France's gaming laws, alleging that these conflict with the open competition principles of the EC Treaty. Should the European Court of Justice find that to be the case the ruling would likely apply to all countries, including Germany, should it change its gambling laws.

German press reports indicate that the state of Schleswig-Holstein was chiefly responsible for the defeat of the banning move at yesterday's meeting. To carry the motion, a unanimous vote was needed to ratify the proposed legislation, but it fell short when the leader of the state of Schleswig-Holstein declined to sign-off on the law. The other 15 German states were apparently agreeable "in principle" to the proposal.

Whilst no firm statement is yet available, media reports are suggesting that the 15 states that agree on the proposed law could attempt to go ahead with it anyway. If this happens there could be further ructions, as politicians from Schleswig-Holstein have reportedly said that they would take the matter to the German Federal Court.

And if the 15 states pressed ahead, it could also raise questions of legitimacy of state licences to operate gaming sites throughout Germany.

The German states will be cautious about the reaction of the European Commission to such a protectionist initiative, too. The leader of the state of Lower Saxony has already been quoted as saying that any state treaty would be presented to the European Commission to examine its compliance with EU obligations.

In summary, the attempt at a unanimous agreement on banning legislation, which would have placed the issue before the federal parliament some time next year, has failed and the status quo remains unchanged.

[dominique]

And if the 15 states pressed ahead, it could also raise questions of legitimacy of state licences to operate gaming sites throughout Germany.

And that is what it boils down to, sooner or later, in all these disputes.

The monopolies may be cutting off their very own legs....