New developments and court cases are emerging on a daily basis in Germany, the latest being an injunction barring prominent online gambling services provider bwin (which was until recently branded as betandwin) from operating under a license it has held for more than 16 years. Earlier this week Munich's local authority (Kreisverwaltungsreferat) closed down more than 60 betting shops, and the Bavarian Media Agency (Landesmedienanstalt) was asked to prohibit advertising for private operators. The Agency has since filed suit against the Bavarian State.
Considering all of these things, it seems that the balance of power is swinging in favor of the state gambling monopolies rather than the private gambling operators.
“So many things are happening," stated Martin Arendts, a German lawyer specializing in German and Austrian gambling law. "Bavaria ordered the City of Munich to prohibit advertising for bwin (which sponsors football club 1860), so the state is really raising a storm against all private operators, particularly against bwin as the main competitor in this part of Europe. These measures are clearly orchestrated."
He continued, "The Saxonian authorities publicly announced that they would revoke the license that bwin e.K. (formely betandwin e.K.) has held for more than 16 years. What has now happened is that the local authority ordered bwin e.K. to close its business (without revoking the license, as far as I see). If bwin does not follow this order, the authority may impose a severe fine (Zwangsgeld). bwin Interactive Entertainment AG was also ordered not to organize or broker sport bets in Germany.
“At the moment, most German court decisions are not in favor of private operators. Things may change if the European Court of Justice (ECJ) follows the Advocate General´s opinion in the Placanica et al. cases. But first of all you can not be sure about the decision of the court, and secondly there still is the problem how the German courts will interpret a vage decions of the ECJ. Several German courts declared not to care about Community law or not to apply it”.
Karin Klein, corporate communications manager of bwin, explained the matter from her company's perspective. "This trading license has been challenged in a number of court proceedings in the past, all of which were decided in favor of Steffen Pfennigwerth, the owner of bwin e.K." she stated. "In the court of competition proceedings in October 2001, for instance, the Federal Supreme Court, German's highest civil court, came to the conclusion that this trading license was not invalid.
“Although this trading license has not been revoked, an immediately enforceable injunction now threatens to prevent Steffen Pfennigwerth from carrying out his business activities. Fines may be imposed if this injunction is not observed within 14 days. At the same time, the Regional Council of Chemnitz has also forbidden bwin again within a period of 14 days to advertise on the domain bwin.com in the Free State of Saxony. Evidently there is massive political pressure to try and maintain the government's German monopoly for as long as possible, notwithstanding the fact that it is both contrary to European law and unconstitutional.
She continued, "Both Steffen Pfennigwerth and bwin will use all the legal means at their disposal and do everything they can to ensure that these injunctions are overturned by Dresden Administrative Court within the period of two weeks specified by the regional council. If, however, the injunction is enforced, Steffen Pfennigwerth has announced that he will be claiming damages of around 500 million euros from the State of Saxony due to the suspension of his business activities.
“In the interests of the Company's customers, the complete range of betting services will continue to be made available on the websites www.bwin.de and www.bwin.com until this issue has been resolved."
Bwin has a broad bouquet of sports sponsorships, including deals with well-known professional soccer teams Werder Bremen, 1860 München, Borussia Dortmund, VfB Stuttgart and several amateur teams. The company also has deals with handball, basketball and hockey leagues. All of the clubs sponsored by bwin display the bwin logo on their jerseys. Bwin pays more than 30 million per year for its sponsorship contracts.
The bwin Group has over 10 million registered customers (including 7 million play money customers) in over 20 core target markets. Operating under international and regional licenses in countries like Gibraltar, Kahnawake (Canada), Belize and Germany, Italy, Mexico, Austria and the United Kingdom, the Group has set itself the goal of becoming the number one address for sports betting, games and entertainment via digital distribution channels. The Group offers sports betting, poker, casino games and soft games. The parent company bwin Interactive Entertainment AG has been listed on the Vienna Stock Exchange since March 2000.