The European Commission has issued a detailed opinion against the draft German State Gambling Treaty.
The commission believes that the proposed German State Treaty is in breach of EU law. If the draft is not substantially changed, Germany risks formal infringement proceedings, referral to the European Court of Justice and ultimately financial penalties.
The European Gaming and Betting Association considers that several requirements in the draft State Treaty are in breach of EU law, including:
The total number of sports betting licences available is limited without justification to seven, whereas the state monopoly for sports betting is exempt from the requirement to apply for a licence;
A tax of 16.67 per cent of the amount wagered imposed on all operators will make online wagering uneconomic;
The licensing system combines offline and online sports betting together and applies a commercial viability test to would-be operators, thus putting online-only operators at an automatic disadvantage in applying for a licence;
While privately owned land-based premises are limited to 350 per licence, no such restriction applies to outlets employed by the state-owned operators;
Certain casino games may be offered online but only by specified casino game operators that are already operating land-based casino games in Germany;
An illegal expansion of marketing is encouraged for the state monopoly, but marketing restrictions are placed on other operators;
The licence fee will favour those applicants with land-based operations that attract higher margins and appears to be unrelated to the costs incurred to deliver and then maintain the licence.
Sigrid Ligné, secretary general of the EGBA, commented: “The draft German treaty has many provisions which are in conflict with EU law. But worse, it is clear that, taken together and especially including a prohibitive tax on wagers from which the incumbent state monopoly is exempt, these provisions effectively slam the door in the face of EU operators from other member states and will in fact extend the monopoly for offline to online games. The Commission must act quickly to stop this test case for its stated aim of a common EU framework for this sector.”
The proposed German State Gambling Treaty comes after a number of preliminary rulings by the EU Court that the current State Treaty is incompatible with EU law. The current law expires at the end of 2011 and the intention was to have the new treaty come into force in January 2012.
Betfair recently filed a complaint with the European Commission over plans to open the betting market in Germany. In the complaint, Betfair stated that plans to grant commercial groups only seven sports betting licences - and only under strict guidelines - are “protectionist” as they would “solidify the existing monopoly” of the states.
