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New infringement proceedings against the inter-state treaty on gaming probably inevitable

October 19, 2012 News & Reports

By Andreas Schultheis

International recognition of Kiel model

Brussels/London/Munich, October 2012 – The European gambling market remains a regulatory construction site, and Germany is anything but innocent in this in this regard. Whilst large parts of Europe have in the meantime passed modern gambling acts geared towards competitiveness and player protection, the German federal states have shifted into reverse gear with the first amending inter-state treaty on gambling (1. GlüÄndStV, or E 15 model) – at least 15 of the 16 federal states, as, up to now, the state gambling act initiated by the CDU and FDP is still effective in Schleswig-Holstein – an act which industry experts consider to be a milestone, as it, among other issues, also regulates the online poker and online casino market. Nevertheless, the governing coalition in Kiel, consisting of SPD, Die Grünen and Südschleswigscher Wählerverband (SSW), is preparing to repeal the act and to join the inter-state treaty on gambling, which continues to face concerns by the European Commission – in contrast to the applicable state law. During the summer, the independent monopoly commission which advises the federal government, had also criticised the provisions of the treaty, and had praised the Kiel act.

Betting providers are questioning tender procedure

In the meantime, the front against E-15 has been growing: The European Gaming and Betting Association (EGBA) has filed an objection with the EU Commission, requesting that the Commission initiate infringement proceedings against the Federal Republic of Germany (see http://www.egba.eu/de/press/614). EGBA is an association of the online gambling and betting providers established, licensed and regulated in the European Union. Secretary General Ms Sigrid Ligné said that Germany is currently preparing to issue licences on the basis of a highly controversial tender process. According to EGBA, there is increasing evidence “that this process is not intended to fulfil the real purpose of an open, fair and transparent trans-European tender process.” One of the aspects which have recently been frequently under discussion is the neutrality of a law firm in Cologne which advises the companies of the German Lottoblock whilst at the same time organising the issue of licences under the new inter-state treaty on gambling.

During the notification proceedings with the European Commission in the spring, the Commission, in view of E-15, had already repeatedly criticised the discrimination of sports betting providers on the one hand and online poker and casino games on the other hand, as well as the arbitrary decision to issue 20 licenses nationwide. The Commission had explicitly left open the option of initiating infringement proceedings. According to Commission statements, the German states have failed to show why online poker and casino games have particular addiction potential and may serve money laundering. The answer from Brussels on the repealing act is expected soon. There is no justification which would comply with European law for the “reverse gear”, and in particular for the discrimination of online poker in comparison with online sports bets; a “no” vote from Brussels is probably as inevitable as the initiation of infringement proceedings against the E-15 monster.

Award for the Kiel gambling supervision

On the other hand, the authors of the Schleswig-Holstein act – which is oriented to the successful Danish model and also regulates the poker and casino segment – have documented how player protection and abuse prevention can be reconciled with attractive gaming options. A short glance to London proves the international importance of this legislation, where last week, during the autumn conference of the International Masters of Gaming Law (IMGL) (see http://www.gaminglaw.eu/wp-content/uploads/2012/10/Artikel-Schlütz.pdf), Guido Schlütz, head of the gambling supervision at the Kiel Ministry of the Interior was presented with the award “Gaming Regulator of the Year” in Europe. IMGL is an association of more than 300 experienced gaming law experts, including state supervision and regulatory authorities, university professors and lawyers, and is represented in 38 countries worldwide as well as in 32 US states. One of the previous winners of the IMGL Award is Morten Ronde, who, as the former head of the legal department of the Danish gambling supervisory authority, is considered as the father of the Danish regulatory model. In his award speech, Ronde compared Schlütz to a successful beekeeper who during his work had at all times vigilantly kept in view all those involved in the process, in order to avoid being stung. He described the Schleswig-Holstein act as a positive further development of the Danish model.

The first German IMGL member joined the international association as early as 2005, and was present during the award ceremony in London: The renowned gaming law expert Dr. Wulf Hambach (http://www.timelaw.de), who won the well-publicised Carmen Media case before the European Court of Justice (ECJ) in 2010: “As I was born in Flensburg, I am particularly happy that this renowned prize will now, after having been awarded to Spain and Denmark, go to my old home state of Schleswig-Holstein rather than to the favourite in France. My bet for next year is Holland, as the courts there also seem to endorse the successful Danish model. This success is easy to explain: The model which Guido Schlütz has now skilfully refined focusses on the effective cooperation of all online gambling supervisory authorities in order to reach a high level of player protection, in particular for international gaming forms, such as online poker tournaments.”

Whilst there are growing indications that the rest of Europe is also following modern and now once more award-winning regulatory models, such as the ones in Denmark and in Schleswig-Holstein, German legislation continues to be characterised by a strict attitude of denial, which will probably lead directly into new infringement proceedings.

Source: Andreas Schultheis

 



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