 Germany
Bans Online Gambling
Dec. 27 (Bloomberg)
-- Online gambling
will be banned in
Germany as of Jan. 1
after German states
ratified an accord
that preserves the
country's state
monopoly for
lotteries and most
forms of betting.
At least 13 of
Germany's 16 states
have submitted the
ratification
documents, Eric
Braum, a spokesman
for the Hesse
government, which
monitors the
process, said in an
interview today.
``That's the
required majority
and we expect to
have all the rest
coming in by New
Year's Eve.''
All 16 state
legislatures voted
by mid-December to
approve the new
online-betting laws,
which the states
negotiated after the
Federal
Constitutional Court
ruled in 2006 that
the former model was
unconstitutional.
The new rules, which
expire at the end of
2011, have drawn
criticism from
Internet betting
companies and
lottery brokers like
Bwin Interactive
Entertainment AG,
Fluxx AG and Tipp24
AG.
The new rules ban
any form of
Web-based gambling
or brokering of
games over the
Internet. The states
may order Internet
service providers to
block Web sites of
illegal betting
operations and banks
to stop money
transfers to them.
The rules'
definition of
illegal gaming
includes placing a
bet from German
territory over the
Web with a company
based outside
Germany.
The regulations also
will outlaw
advertising of
gaming over the
Internet and on
television.
Advertising in print
and other media may
no longer ``directly
invite, incite or
prompt'' customers
to play; it may only
``inform'' about the
possibility to do
so.
`Contrary to Law'
Tipp24 said last
week that the
company ``doesn't
see its business
model jeopardized''
because it expects
the new rules to be
overturned in court.
The company regards
the regulations ``as
clearly contrary to
law and will sue for
its rights if
necessary,'' Tipp24
said in a statement
Dec. 19.
Bwin sued four
German states on
Oct. 30 seeking to
continue offering
online bets after
the rules come into
effect. The cases
are pending.
Bwin operates a site
under a license
originally issued by
the communist East
German government
before unification
and another portal
under a Gibraltar
license. The company
claims that both
permits prevail over
the new
online-betting ban
and will continue to
operate its sites.
``We think that in
the second half of
2008 the European
Court of Justice
will have stopped
this futile effort
to keep us out of
Germany,'' Hartmut
Schultz, a spokesman
for Bwin, said in an
interview Dec. 18.
The European
Commission, the
European Union's
Brussels- based
regulator, called on
Germany to
reconsider the total
ban on online
betting, saying the
step was
disproportional. In
April, Germany
rejected that
demand, arguing the
rules are needed to
protect citizens
from the dangers of
gambling.
``I am pretty sure
the commission will
escalate the process
and send a formal
warning the day
after'' the new law
takes effect,
Wolfgang Kubicki,
leader of the FDP
opposition party in
Schleswig-Holstein's
Parliament, said in
an interview on Dec.
20. ``Berlin will
have something in
the mail on Jan.
3.''
The commission can
sue EU member states
to force them to
comply with EU law.
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