A few months ago many in the online gaming industry were unsure about the long-term future of cross-border gaming throughout Europe, but now the outlook is much more positive, especially with recent court developments in Germany.
 |
"If Germany will decide for more liberalization then the Netherlands, Belgium and all the other countries will certainly not be in good position to uphold their monopolies."
|
|
In October 2003, the European Court of Justice ruled in principle that any member state that allows government-controlled gambling monopolies, as well as the advertisement of gambling activities, must also allow foreign, E.U.-based companies to access the market as part of the Freedom of Services Act.
A slough of cases has been filed within the German courts and other EU jurisdictions since then. In light of the enormous amount of German cases, Interactive Gaming News talked to attorney Martin Arendts. Arendts, a partner with German law firm Arendts Anwaelte and an expert in gaming law, feels that the developments in the next six months to a year in Germany could have far reaching implications for the rest of Europe.
IGN: A lot of court action has sprung up throughout Germany in the aftermath of the Gambelli decision hasn't it?
Martin Arendts: Germany is probably the leading country in the fight against gambling monopolies at the moment. We have the most cases at the moment in our court systems compared to the Netherlands, Belgium and France. There are about 15 cases now that have been filed after the Gambelli decision by the European Court of Justice.
There are more cases in favor of liberalization and in favor of the freedom of services argument in Germany than anywhere else. But there still are some judgments that are against any liberalization in any gaming law.
IGN: It wasn't that long ago that many legal experts in the gaming industry thought it would be awhile before gambling monopolies would be done away with in Europe. It sounds like that school of thought might be changing a little bit.
MA: In the long run, monopolies are bound to fail, in my point of view. There is no telling when it will happen though. It maybe two months in Germany; it might be one, two or three years from now. There are still a lot of things that need to be determined. It certainly will not mean complete liberalization, We will certainly get new legislation and new restraints in Germany, but it won't be as tight as it used to be or as tight as it is now.
IGN: Do you see that trend taking hold in other countries in Europe as well, even if the timeframe is different?
MA: Probably. If Germany will decide for more liberalization then the Netherlands, Belgium and all the other countries will certainly not be in good position to uphold their monopolies.
We still hope that we get a new decision by the European Court of Justice, and we will also try to get the German courts to bring a German case to the European Court of Justice.
IGN: What would bringing a German case to the ECJ entail?
MA: We would then get a decision concerning a German case. The monopolies at the moment argue that the Gambelli case doesn't affect them. They argue that it is in Italy and that is a completely different set of circumstances and situation. Italy protects the monopoly ,but in Germany it is completely, completely different. That is their argument.
If a party in one of the pending cases wanted to have the case moved to the ECJ, that issue could be cleared up. But in order for the case to be heard, it would have to involve a party outside of Germany that is a company or person from an E.U. member state that feels their activities are being blocked because of the regulations here in Germany. There aren't a whole lot of pending cases that met that requirement, but new ones are always popping up.
IGN: You mentioned there are a lot of pending cases right now in Germany. Is there one or two that are major cases for the industry to be following?
MA: The arguments are usually the same. Those against liberalization usually argue that it is the duty of the state to protect citizens. They argue that you have to control people to prevent them from having to lose so much money on gaming and sports betting. That is usually the argument in favor of the state.
We, of course, argue with the freedom of services. The state monopolies have been very aggressive in fighting for new customers. They spend a lot of money on marketing and advertising their new products and distribution channels. It is not very coherent, at least according to the Gambelli decision. There is a section in there that says one member state advertising gaming cannot forbid private (companies) from doing the same thing.
IGN: Is there any case in Germany that is trying to drive home those main points in the Gambelli case without having the ECJ intervene?
MA: The Bet At Home ruling was a big blow for those who want to see monopolies continued. The court ruled that the company could offer bets to Germans even though it didn't have a German bookmaking license. The fact they were licensed out of Austria, which has a very high regulation structure, was good enough in the eyes of the court for them to operate in Germany. There have been a handful of cases that have been decided in the wake of the Bet At Home decision as well, all ruling the same way.
IGN: So if you could nail down a timeframe one when these cases will be wrapped up, what would it be?
MA: You get the impression that it could be cleared up real soon, but then again it is the court system and it could drag on for a very long time. There have been lots of hearings on these cases, but the court doesn't open its opinion or give any indication on where it is leaning until its decision is announced. A lot of times it is a case of luck in terms of how a case is going to be decided.
It may be very tough for this issue to be cleared up in the short term though. The courts have a tendency to overlook the consequences of their decisions. It is very tough to decide if gaming and gambling should be completely liberalized or not. The courts know how serious of an issue this is and what kind if implications any decision could have on the whole industry for a long time to come, so the chances of them overlooking anything on this issue are a long shot.
IGN: Do you have any kind of a gauge in terms of what other EU countries are doing or whether they are leaning one way or the other?
MA: The European Commission is going to do some research in Denmark and Greece. They are preparing to argue that the national legislation there is against the freedom of services mandate from the E.U.
There are a lot of different approaches to the industry among the jurisdictions though. There is Austria, which is completely liberalized, and we still don't know how the Gambelli case will be interpreted in the national courts in Italy; that will be an interesting development to follow. How the Italian court is going to handle the ECJ ruling could answer a lot of the questions being raised in other jurisdictions. All the European Court of Justice does is give the criteria for how cases should be dealt with. Then the national courts have to follow their lead.