A Chink in the Armor?

7 February 2007

The Baden-Württemberg Administrative Court of Appeal's recent ruling in the case of an agent for a foreign betting operation could prove to be a windfall for those trying to break the German states' gambling monopolies.

In its decision of Jan. 25, 2007, the court dismissed an appeal filed by the state. The plaintiff, a sports betting agent for a Maltese sports betting company, succeeded in the last level of jurisdiction against an order of prohibition issued by the Regional Council of Karlsruhe.

Now, in the preliminary proceedings, no further appeal is possible, and the main proceeding will probably take a few years. The agent is, therefore, allowed to resume transferring bets to the Maltese bookmaker.

The Administrative Court of Stuttgart, in its decision of Nov. 23, 2006 (file-no. 4 K 3895/06), had already ordered suspensive effect of the legal action, and, thus, granted stay of execution to the agent.

"The Administrative Court of Appeal pointed out that the Federal Constitutional Court, in its sports betting decision of March 28, 2006, ordered the states to consequently focus the current betting monopoly on fighting betting addiction and limiting betting fervor even during the transitional period, the plaintiff's lawyer, Martin Arendts, explained. "The Administrative Court of Stuttgart had answered the issue in the negative. The Administrative Court had pointed out that it could not find measures limiting the distribution channels criticized by the Federal Constitutional Court.”

Arendts also pointed out that the court expressed doubts about effective youth protection. According to the Administrative Court of Appeal, Baden-Württemberg still had not complied with the requirements of the Federal Constitutional Court. Further, he added, the appeal did not go into the issue of advertising by the state-owned Staatliche Toto-Lotto GmbH Baden-Württemberg which, according to the Administrative Court of Stuttgart, exceeded pure information.

According to Arendts, all this exemplifies the continued diverging jurisdiction of the administrative courts regarding the cross-border transfer of sporting bets.

"Whereas several administrative courts of appeal (such as those in North Rhine-Westphalia, Bavaria and Berlin-Brandenburg), affirmed prohibition orders contradicting the criminal law judgment, others (such as the administrative courts of appeal of Schleswig-Holstein and Saarland) expressed severe legal doubts and granted stay of execution," Arendts said. "The Administrative Court of Appeal of Baden-Württemberg now followed this latter opinion. One can only hope that the European Court of Justice is going to clearly rule on the importance of the freedom to provide services and the freedom of establishment with regard to the cross-border provision of sports betting in the upcoming Placanica decision, now awaited to be pronounced in March."

Rob van der Gaast has a background in sports journalism. He worked for over seven years as the head of sports for Dutch National Radio and has developed new concepts for the TV and the gambling industry. Now he operates from Istanbul as an independent gambling research analyst. He specializes in European gambling matters and in privatizations of gambling operators. Rob has contributed to IGN since Jul 09, 2001.