Berlin's Internet Cafes Need Gambling Hall Licenses

15 January 2003

Police in Berlin have been raiding local Internet cafes in an effort to crack down on illegal activity. Among charges brought against cafe owners is offering gambling without a license.

The first series of raids came in early October 2002 when authorities targeted 20 of Berlin's registered Internet cafes and an undocumented number of illegal back-room Internet operations. The Police found a total of 59 infringements concerning youth protection legislation and breaches of distribution of pornography and closing times. They also checked 150 individuals on the spot, 107 of which were minors. Above that 60 PCs were levied a distress, as well as 6 CDs. One cafe owner was forced to pay 85,000 Euro on the spot to the tax authorities and could have his cafe shut down.

Police also found illegal "gambling halls" in seven of the cafes.

A second series of raids took place at the end of October and a third at the beginning of December.

In the meantime, the first wave of offenders was tried, and the administrative Berlin High Court (Oberverwaltungsgerichts) ruled that all high-tech cafes offering games on its computers need a valid gaming license. They must also pay entertainment taxes, which could run as much as 600 Euro per month per computer.

The judges view a computer as a multifunctional device, which falls under the Industry Law "ยง 33 i Abs. 1 Sence 1," just like a gaming machine, and therefore needs a license. The ruling to which the judges refer, says that the one who "professionally runs a gambling hall or wants to run a resembling business, which exclusively or preponderantly serves the installing of gaming machines or organizes other games" needs a license.

The primary reason for the raids was to protect children against gambling and exposure to extremely violent games. What resulted, however, was authorities having to come up with dubious measurements as to what is considered a gambling hall.

The ruling will likely be appealed.

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.