There are reports that an EU ruling may have just opened the German online sports betting market to competition from betting sites licensed in other EU member nations. Specifically, the EU court found that Germany’s cap of 20 online betting licenses constitutes an infringement on EU free trade agreements.
This ruling effectively neutralizes the German Interstate Treaty on Gaming. With that, sports betting sites based out of other EU nations may now accept customers from Germany without fear of legal repercussions. The burden is now on the German government to update its laws and bring them in line with EU regulations.
Punters from Germany will surely welcome the news. Back in 2014, the German government threatened to block financial transactions to and from unauthorized betting websites. The government never followed through on the threat, but that is now one less thing to worry about.
Today is not the first time the EU has put Germany on notice. Lawmakers have been warned by the EU repeatedly that existing legislation is contrary to EU law and that changes need to happen soon.
Germany’s current legal issues date back to 2008, which was when the first version of the Interstate Treaty on Gaming was enacted. The EU quickly ruled the treaty anti-competitive and ordered Germany to amend it. German lawmakers acquiesced with an amended treaty that allowed a total of 20 betting licenses to be offered to operators. However, the government delayed the process repeatedly and never ended up awarding any licenses.
At that time, the state of Schleswig-Holstein opted out of the updated treaty to pursue its own regulation that would have awarded up to 50 licenses for online gambling, poker and sports betting sites. Seven licenses were finally granted in 2012. A new state government took power in 2013 and revoked the state law, but not before those seven licenses went into effect.
The new government decided to allow the licensed operators to continue doing business until the six-year licenses went up for renewal – with the plan being to not renew those licenses in 2018.
Moving back to today, the onus is now on the German government to amend its gaming laws. Discussions among lawmakers and industry groups are already underway, but there is no consensus on how to proceed. Germany’s state lotteries are loath to deal with increased competition from online betting sites and seem stuck on the old model which clearly does not work.
One other sticking point that will need to be resolved is where any changes in Germany’s gaming laws take place. Each German state has a relatively wide range of autonomy, and if regulation proceeds on a state-by-state basis, it will make for a complicated and fractured market. On the other hand, individual states and monopoly lottery operators may be hesitant to submit to federal legislation.
This all makes for a complicated mess in Germany, but something will give eventually. In the meantime, German punters may soon have access to a greater number of betting sites headquartered in other EU nations.