The 10 casinos in the German state Lower Saxony were privatized in December 2004 under the ownership of Spielbanken Niedersachsen GmbH. The new owner, a full daughter company of Casinos Austria International Holding GmbH (CAI), paid 90.6 million euros for a 10-year license.
And according to the Finance Ministry, 7.6 million euros went toward the planning and development of an Internet Casino in Hanover, but the Lower Saxony government objected to the Internet license--a position based on the German Constitutional Court's ruling that as of the end of 2008, advertising for and expansion of gambling will no longer be allowed.
Casino Austria CEO Paul Herzfeld said his company will fight the decision.
"Just briefly, yes indeed, an online casino license was part of the deal," Herzfeld said. "With the recent negative decision by the Ministry of Finance of Lower Saxony, Spielbank Niedersachsen cannot operate its online casino, although the highest responsible gaming standards, as well as other operational standards, have been implemented. Now we have filed a court case, so let's see how this will develop."
In the meantime, Casino Wiesbaden, a property of Spielbank Wiesbaden GmbH & Co. KG, has had a license to operate Internet casino games in Hessen since July 12, 2004. The license is legally based on a Hessian casino law passed in December 1988 and amended in November 2002.
Participants must be at least 21 years old and must have their main place of residence in the German federal state Hesse; be in the German federal state Hesse when participating in the game; or be in a foreign country where participation in foreign gaming is legal.
(A side note: Germany's first online casino, operated by the Spielbank Hamburg Group, went live in the state of Hamburg on Oct. 28, 2002, but it was determined three days later that the state's senate is not empowered to issue an online gambling license. The site ultimately shut down on Oct. 24, 2003.)
So there is Spielbank Wiesbaden, which has an online license, and Casinos Austria, which bought a license via privatization, but is not allowed to operate an Internet casino. The situation should be good food for lawyers.