ECJ rules that German gambling legislation contravenes EU law

The European Court of Justice’s (ECJ) long-awaited ruling on the compatibility of Germany’s State Treaty on Gambling with European Union law has seen the body condemn the legislation as contravening key principles of European Union (EU) law.

Centring on the case of Sebat Ince, an Austrian prosecuted for illegally facilitating online gambling in Germany, the ECJ has ruled that Ince cannot be prosecuted under the terms of the 2008 State Treaty. It has also come to the decision that as a result of a lack of transparency and the continued presence of what amounts to a lottery monopoly in the market, they are equally exempt from prosecution under the revised but equally controversial 2012 Treaty.

Ince was originally charged with violating the terms of the 2008 Treaty early in 2012 – despite that legislation expiring in 2011 – and the 2012 Treaty once that came into force in July that year.

This second part of the ruling is widely seen by many, including operator body the German Sports Betting Association (DSWV), as confirmation that the State Treaty does not comply with European laws, paving the way for a total overhaul of the country’s gaming laws.

The court explained that the freedom to provide services prevents an EU member state from penalising the unauthorised mediation of sporting bets where the company or individual needs to secure a licence via a procedure that "does not observe the principles of equal treatment and non-discrimination on grounds of nationality and the consequent obligation of transparency."

In certain cases, such as this particular case, the system’s flaws mean that despite provisions being put in place permitting private operators to obtain licences, there is still in effect a public monopoly in place, contrary to EU law.

This is not altered by the fact that the State Treaty is "experimental" legislation, designed to be enforced for a set period before being reviewed.

"The Court notes in this regard that the experimental clause has not remedied the former public monopoly’s incompatibility with the freedom to provide services in so far as, regard being had to the fact that no licence has been granted and that public operators may continue to organise sporting bets, the former regime has continued to apply in practice despite the entry into force of the 2012 reform," the ruling explains.

DSWV president Mathias Dahms has greeted the ruling with a call to action, urging the German authorities to totally overhaul the legislation.

"Today proves once again that the State Treaty on Gambling violates European law," he said. "It is now no longer sufficient to continue trying to repeat failed concepts. It is time for a fundamental reform of gambling regulations in the federal states."

Dahms noted that the past three incarnations of Germany’s gambling laws have all been declared in contravention of European Union law.

He added that amending existing laws would have no effect: "Simply raising the number of sports betting licences will not resolve the basic design flaws of the Treaty. Instead we need to constructively discuss a comprehensive revision of the laws."



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