German States Advised to Change Draft Agreement on Gambling Monopolies

23 March 2007

German Industry Commissioner Guenter Verheugen has written a letter to the German federal states, warning them that their draft agreement to restrict sports betting to state monopolies needs to be changed within 30 days.

The move is one of several developments this month that, according to many observers, signify drastic change in favor of Europe's private gambling operators.

First came the groundbreaking judgment by the European Court of Justice in the Placanica case, clarifying that monopolies can only be protected if doing so is in the best interest of the public. Shortly thereafter, the European Commission announced that it will continue infringement proceedings (pertaining to gambling monopolies) against three member states.

EU Internal Market Commissioner Charlie McCreevy, meanwhile, has warned Washington of possible legal action at the World Trade Organization concerning the United States' anti-gambling laws.

The new development in Germany relates to an ongoing situation in which the states have agreed upon a policy to ban private operations from doing business in each and every state.

Despite these efforts, however, a new MECN study highlights long-term expectations for partial liberalization of the German betting and lottery market. The study, largely based on the results of a survey of market experts conducted in spring of 2006, yielded the following findings and conclusions:

  • Online poker offers great potential.
  • Liberalization will begin in 2012.
  • Private oberators Tipp24 and Fluxx will not be banned.
  • Advertising for gambling on sports team jerseys and in stadiums will be permitted.

The study, prepared by Martin Oelbermann, an MECN partner, also states that the decision in the Placanica case cannot simply be applied to the German market because Germany and Italy (where the case originated) have different gambling laws.

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.