A Lost Business Opportunity?

26 July 2002

On Jan. 10, 2002, the Hanseatisches Oberlandesgericht, the Hamburg High Court, rejected an appeal introduced against the April 2001 decision of the Hamburg Landesgericht prohibiting a German company to insert a link towards, to make publicity about or divulge relevant information about an Austrian online bookmaker.

The plaintiff, controlling the Austrian company bet-at-home.com GmbH, held that it was not offering games to the public but only provided "additional" services, such as sports information, betting tips and links. In addition, it stated that on its Web site, it only provided objective information concerning the company structure, i.e. something justified for informing its creditors and stakeholders. Furthermore, the company, by doing so, tried avoiding insider knowledge.

Finally, it argued that, although it provided information related to online wagering, it was not undertaking any of those activities and that it had no control whatsoever over the Web site www.bet-at-home.com.

However, the Oberlandesgericht held another opinion.

Although the Austrian subsidiary of the plaintiff had an official Austrian license, its activities had to be considered as infringing the German Criminal Code.

The Court followed a two-step reasoning.

In the first place, the German Criminal code states that the organization of games, the so-called Gl├╝cksspiele, was illegal unless the required license had been granted. Therefore a German license is required to organize games in Germany. In the second place, the Court held that, notwithstanding the fact that the Austrian company held an Austrian license, a German license is required when its activities are directed to the German market. Even if a service is provided from abroad, when providing German consumers the possibility to place bets, the foreign company is extending its field of operation towards the German market and should be submitted to German law. The facts that the site was hosted on an Austrian server or that the Web site was in English were considered as being irrelevant.

Furthermore, the court rejected the plaintiff's remedy to article 49 of the European Community Treaty.

Although this article guarantees the free provision of services throughout the European Union, member states can override this freedom in order to safeguard general interests and public order.

By referring explicitly to the 1999 Zenatti (European Court of Justice, Oct. 21, 1999) decision of the European Court of Justice, the Hamburg Court considered that the adopted measure was imposed to protect the public interest and was necessary and proportionate to reach that objective.

Considering that the provision of such activities to the German market without a German license was infringing German law, the German company by wittingly lending its assistance to the operation of the Austrian site was collaborating to the commitment of a criminal offense and had to stop its activities. Therefore it had to remove from its Web site every link to online gaming sites and stop divulging the information concerned.

Click here to view a copy of the Hamburg Landesgericht case (in German).




Ewout Keuleers is an attorney at the Bar of Brussels and a senior researcher at the Centre of Computer and Law (University of Namur, Belgium). He can be reached at e.keuleers@gmail.net. He obtained his law degree at the University of Leuven (KUL) and has a Masters Degree in Information Technologie (FUNDP).