DJ Noerr LLP: Still many questions after the decision on opening of German sports betting market - not even the lottery monopoly is secure yet
Noerr LLP / Key word(s): Law/ Noerr LLP: Still many questions after the decision on opening of German sports betting market - not even the lottery monopoly is secure yet DGAP-Media / 11.03.2011 / 14:51 Still many questions after the decision on opening of German sports betting market - not even the lottery monopoly is secure yet Munich, 11 March 2010. After agreement between the prime ministers on the first pillars of a new State Treaty Concerning Lotteries, many detailed questions on the planned market opening for private sports betting providers remain unanswered. Not even the continuation of the state lottery monopoly is secure yet. So stated media lawyer Dr. Martin Diesbach and expert in Eu law Martin Ahlhaus of Noerr LLP in Munich. The federal states react with their planning to the judgement of the European Court of Justice and of the Federal Administrative Court which expressed doubts about the existing gambling monopoly in Germany. In the view of the Noerr experts, important details still need to be clarified. Particularly concerned is the grant of licences for sports betting, the justification for the lottery monopoly and coherent regulations for the entire gambling market. Martin Ahlhaus and Dr. Martin Diesbach answer important questions: Q: The decision in principle of the prime ministers' conference states that licences for sports betting providers are to be issued nationally or regionally, possibly also temporarily under an 'experimental clause'. Does this remove the legal reservations against the State Treaty Concerning Lotteries? A: The decision in principle of the prime ministers' of the federal states is at least in the right direction. The ECJ emphasised that the German gambling monopoly is met with considerable reservations. This assessment is based mainly on the fact that the objective of the German monopoly, the prevention of addiction, is not consistently implemented. While gambling with high addiction potential such as gambling machines are not subject to any state monopoly, sports betting, with only a minor degree of addiction potential, are reserved to state providers. Opening the market in sports betting to private providers is intended to take account of this consideration. Q: Is the retention of the state lottery monopoly then logical? A: In fact, the federal states have a considerable interest precisely in the retention of the lottery monopoly. It is first and foremost the income from the state lotteries which the states want to secure. This appears to be legally arguable, but not from the point of view of addiction prevention because the lottery has only minimal addiction potential. It is therefore to be expected that the federal states in an amendment to the State Treaty Concerning Lotteries will produce other grounds to justify the state monopoly. Prevention of malpractice would be the main candidate. Lotteries are prone to malpractice which could justify a state monopoly under European as well as German constitutional law. Details naturally depend on the actual structure of the monopoly. Q: Details of the granting of sports betting licenses are not yet settled. Aren't there legal provisions to this end too? A: At the present time, various models are being discussed by the states. Whether the licenses will be issued nationwide or regionally, without time limit or just temporarily, e.g. under a temporary 'experimental clause', still has to be decided. But of course the criteria for the selection of licensees must be very carefully prepared. The issue of a limited number of licenses can be expected to result in stiff competition between the providers. In view of the considerable market potential in Germany, legal disputes in the course of the issue of the licenses are not in the least excluded. Only then will it be apparent whether the new regulation of gambling in Germany is sustainable. Q: Is the decision in principle of the prime ministers' conference already having effects? A: The prohibitions in the State Treaty Concerning Lotteries remain in force even after the decision in principle of the prime ministers' conference. Neither this decision in principle on the future new regulation of gambling in Germany nor the preceding judgements of the ECJ have changed that. However, it is to be expected that the practice of authorities and courts will take account of this decision in principle. It would be hard to understand if precisely vis-à-vis sports betting providers a monopoly proved to be subject to European law reservations would be strenuously defended, although it is intended to be liberalised a few months later. We expect that authorities and courts will now more easily adopt the legal reservations against the present State Treaty Concerning Lotteries and no longer impose penalties on private gambling providers. Q: What happens now? A: The federal states will, on 6 April 2011 in a special prime ministers' conference, settle further details of a new regulation. However, it must be doubted that by then a final new State Treaty Concerning Lotteries will have been prepared. We rather expect a political decision in principle on significant questions for example, the limits to licenses according to number, region, duration and other aspects such as the state monopoly on lotteries, the permissible advertising and regulations for other games, in particular in the online sector. Other discussions with the federation are also imminent in the area of gambling machines and in order to procure the coherence demanded by the ECJ of German gambling law. The decision of the prime ministers of 10 March 2011 is therefore only the beginning of the legal fine tuning of a new State Treaty Concerning Lotteries, the stability of which must still be tested by the courts. Matthias Schulte PR-Manager Assessor jur. Noerr LLP Börsenstraße 1 60313 Frankfurt am Main / Germany T +49 69 971477418 F +49 69 971477100 M +49 171 9777705 matthias.schulte@noerr.com End of Media Release =-------------------------------------------------------------------- 11.03.2011 Dissemination of a Press Release, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de =-------------------------------------------------------------------- 115313 11.03.2011
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March 11, 2011 08:51 ET (13:51 GMT)
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