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Will the ECJ Overturn Germany's New Gambling Regulation?

25 November 2020, 17:06 CET

The European Court of Justice has already interfered with Germany's gambling law in 2012. It might do the same once again in 2021 given controversies over the new regulation.

Justice - Image by succo on Pixabay

Gambling has flourished in territories from all over the globe, securing new sources of revenue for all states that decided to embrace it lately. To notice its success, we should just look at America whose numerous states legalized sports betting after the 2018 PASPA repeal. Each of them is looking at serious profits at the moment.

A mere look at the American online betting sites, i.e. BettingBilly, reveals the size of the market. You can find dozens of safe and legal online betting hubs there, available for each resident of states that have adopted sports wagering. The same pattern can be recognized in almost every country that has made gambling available to its residents. It is very hard to impose the right gambling laws due to the nature of the industry, but once you do so, it is a win-win situation for both the country and the residents.

The history of German gambling laws was dramatic. The country's strict and somewhat discriminating laws provoked the European Court of Justice (ECJ) to interfere in 2012. Will the European body countermand the new German gambling laws in 2021? Before moving on to these, let's just briefly remind ourselves of what had happened in 2012?

Germany changed the gambling laws in 2012, courtesy of an ECJ opinion

Back in 2012, German prosecutors were about to put an owner of a bar in jail for up to two years. He went against the law by housing a betting machine inside his bar. The machine run under the license issued in Austria, not Germany. According to German law, the offender should have spent up to two years in prison for that "crime".

The then-existing law has been applied since 2008 when the German Interstate Treaty on gambling completely forbade online wagering in the country. The betting/gambling premises were only allowed to be operated by state-sanctioned organizations.

The European Court of Justice then decided to interfere stating such legislation went in contrast to the European law. They believed that outfits that offered gambling services under licenses granted outside of Germany should have not been prosecuted whatsoever. The German regions responded by changing the law in 2012. Since then, all private ventures that offered legal gambling (not only Germany-based) could have been granted licenses for a limited period.

An opportunity for a more liberalized law in 2021

Online gambling providers have carefully followed the situation with German gambling laws ever since the early-2020. Back then, they recognized the intentions of the liberalization of strict gaming regulations. At the start of the year, the federal states agreed on a more liberalized law that was due to be implemented as of July 2021. The law was submitted to the European Commission for a check and everything seemed ideal for betting suppliers across the country.

Nevertheless, the positive start was quickly overshadowed by the old and familiar woes as the Administrative Court of Darmstadt gave up the sports betting licensing procedure even before the inaugural license was issued. The problem popped up because the German law allowed for no more than 20 sports betting licenses to be granted during an experimental phase. Such a limitation was in contrast with the European Union law.

This is where we come to the question asked in the very title of this article. We wrote about the happenings in 2012 when the European Court of Justice overturned the German gambling laws. Looking at the new regulations, there is a high chance we will witness the new interference from the side of the European body. This is, after all, why the Administrative Court of Darmstadt quitted granting the licenses under the regime.

According to European regulations, the German sports betting licensing process was created in a discriminatory fashion. It has to be more transparent and it has to treat all gambling operators in the same way. This one does not seem to be designed with such an approach.

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