Eye on Europe - 18 April 2007

18 April 2007

Denied -- GmbH & Co. Spielbankenbetriebs KG i. Gr. (GmbH), the privately operated German casino, was unsuccessful in its attempt to obtain a casino license in Bavaria. GmbH was denied permission by Germany's top constitutional court to operate casinos in Bad Fuessing and Feuchtwagen, where state-run casinos already operate. In a faxed statement to Bloomberg, the court said: “The law limiting the establishment of casinos aims to defend the public from dangers that may result from exploiting the passion of gambling.“ The court added that the law restricting casino licenses is intended to combat addiction and, as such, does not violate the German Constitution. Rüediger Zuck, counsel for GmbH, said privately run casinos in other German states have successfully implemented anti-addiction programs. ”The biggest scandals in casinos happened in state-run casinos," Zuck told Bloomberg. "It is not a good idea that the state runs a casino and then controls itself.” Staatliche Lotterieverwaltung, the state agency for gambling, runs the nine casinos in Bavaria. Other German states allow private companies to run casinos, the news source said. The April 12 ruling in the GmbH case, designated 1 BvR 2228/02, follows a string of conflicting decisions from the European courts regarding state-run gaming monopolies.

Svenska Spel Speculations -- Swedish MP Tomas Tobé, a Moderate Party member, is spearheading the drive to privatize the country's gambling industry. Tobé and his party colleagues from Gävleborg County will put forward a proposal during the Moderate Party’s conference in October 2007 to end Svenska Spel's gaming monopoly. “It is difficult to judge how many parliament members want legislative reform of the gambling market, but it should be possible to get a majority in favor of such a proposal," Tobé told IGN. "And until now there [has been no] information given about the possible sale of Svenska Spel, which indicates that no privatization will take place during this mandate period." Tobé said that, in the meantime, the government should work to generate a market model with a strong focus on regulation.

Swedish Government Stands to Gain Big -- The investigation service of the Swedish government conducted a survey on Betsson, Unibet and Expekt--the three largest operators targeting the Swedish market. The survey's goal was to calculate the tax revenue for the Swedish state, assuming those companies could operate within Sweden. The research commission projected that the government could derive an estimated 30 million euros ($40.7 million) from gaming tax on win (10 percent), company tax (28 percent) and employee taxes for social welfare.

Coming Soon -- On April 19, bwin’s fourth quarter and full year results will be released, with its annual report to follow.

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.