The biggest European market, Germany, has become the test center for new legal developments in the gambling industry, and many lawyers are dedicated full-time to the situation. One of them is 30-year-old Wulf Hambach, who along with his brother, Claus, 32, runs the law firm, Hambach & Hambach.
Wulf specializes in German and European betting and gambling law and media law, while Claus' disciplines include banking; stock market and investment law; and German and European gambling law. The law firm now employs 10 legal officers, specializing in a broad array of practices, including media law, tax law, IT law and more.
The firm's client base includes Sportingbet, the Carmen Media Group and the publishing house Gambling Exklusive S.L. In the German market, it represents leading gaming operators and German and international Media Firms that are cooperating or plan to cooperate with the gaming industry.
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"What I definitely don't like is that the state puts forward its pretended argument against problems like gaming addiction. The truth is that it doesn't matter if the state or a private company is running a gaming operation, but it does matter if the gaming operation takes place in a regulated environment."
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IGN: You have taken a clear stance toward the monopolies. Why?
Wulf Hambach: I favor always the "regulated freedom." I believe strongly in a free market economy. The telecommunication market is a good example where liberalization meets regulation to reach a trustful free market where the customer is still protected. My guess is that, in the long term, the gambling market will follow the electricity market, which in is in Europe on the right track towards a liberal free market. What I definitely don't like is that the state puts forward its pretended argument against problems like gaming addiction. The truth is that it doesn't matter if the state or a private company is running a gaming operation, but it does matter if the gaming operation takes place in a regulated environment. In Germany, for example, the state operator is mostly self-controlled, which could lead to system errors. Like, for instance, the case of the referee scandal where the Bundesliga referee Hoyzer and the defrauder Ante Saphina were motivated to manipulate betting events because it so easy to place a bet at the state bookmaker ODDSET, without an identification obligation and because ODDSET did not have an effective early recognition warning system.
IGN: What will happen on Mar. 28, when the Constitutional Court announces its famous sports betting verdict?
WH: Most definitely a partial liberalization of the sports betting industry. However, this decision will not bring an immediate end to the German Gambling monopolies. But I think that this decision could, under the right circumstances, become an efficient weapon in the battle against state monopolies on gambling.
IGN: Why are there so many lawyers in Germany involved in the gambling industry?
WH: Are there really that many? Well, even Hans-Juegen Papier, president of the Federal Constitutional Court and Head of the Chamber which is deciding the seminal sports betting case, said in 2005 that Germany's gambling industry--and especially its law--is very complex and opaque. That might be the reason why the gambling business in Germany can be best understood by legal experts.
IGN: What will be the World Cup turnover?
WH: According to an estimate from the consultancy firm GBGC, this sporting event will generate some 1.67 billion euro for operators. The taxes will not earn a lot because the German gambling tax regime is an old fashioned one and does not face the problems of new technologies and cross-border gambling.
IGN: And which betting companies will be the big winners?
WH: Definitely Betandwin, and also the state operator, ODDSET. Other German betting companies, like Digitbet (wetten.de) or Sportwetten Gera (sportwette.de), will also benefit from the betting boom during the WC 2006. And furthermore, bookmakers who already have the foot in the (German) door like Eurosportwetten (Sportingbet), Betfair, Expekt, PAF and Gamebookers. But also Bettingshop operators (at the moment there are approximately 1,200 shops open), like Betshop (U.K.) and Certbet (Austria) and Cashpoint (Austria) will gain extra business during the WC 2006.
IGN: You were very critical of the organization of the World Cup Soccer. Why?
WH: The World Cup is being organized as a "private event" of the FIFA. Therefore, the FIFA is enforced to use all legal measures against businessmen who try to use any marketing tools in connection with this event. This leads to mainly the protection of the German and European trademark laws. Most of the imaginable words and terms which might be used in connection with the WC have been protected by the FIFA via their entry into the German trademark list. [Therefore], the FIFA may forbid and admonish every identical or even similar (confusable) usage of the terms. For example, a German sweets producer (Ferrero) lost a case before the European trademarks department in which Ferrero tried to reject a claim of the FIFA because of the usage of the term of "WM 2006" on one of their products. A comparable German case before the Federal Civil Court in Germany will be brought to an end in an expected decision on Apr. 27, 2006. This is when the court will decide whether "Fußball WM 2006" (Soccer WC 2006) is a "protectable term" at all; especially regarding the identification of certain products and services. Therefore, every businessman dealing in the area of the WC 2006 needs to take special consideration of the danger of being admonished or sued for the usage of FIFA terms for his marketing in Germany, but also in the EU.
IGN: You stated after the decision of the European Parliament, which decided gambling was not part of the Service Directive, that it is now more likely that countries will be forced to recognize that current European law already permits cross-border gambling within the EU. Wishful thinking?
WH: This is absolutely not wishful thinking. Commissioner McCreevy said that the next step on this issue will have to be infringement proceedings against non-compliant states. As the EU commissioner for internal markets and services, which would be responsible for deciding to bring any infringement proceedings, he can be regarded as one of the most authoritative in this area. This would suggest that the next step will indeed be these infringement proceedings, but admittedly this cannot be certain.
Back in Janurary 2005, the EU Commission ordered the Swiss Institute of Comparative Law to undertake a study on the analysis of the situation and development of the union for services in the area of gambling. This spring the Institute will present its result to the commission on whether the internal market in this area functions smoothly or not. One of the results of the preliminary findings of the study (Martyn Sychold, the leader of this project presented these finding during a conference I attended in January 2006) is that most of the courts in the member states have simply ignored the proportionality principle in their decisions. The proportionality principle could lead to the result that the exclusion of private gaming operators from a national gaming market would be unjustified. I believe that the Swiss study will disclose many more system errors in those regulations which confirm the state monopolies on gambling. After the study will be published in May 2006, the commission will definitely have extra firepower to file new infringement proceeding against several member states.
IGN: What is the legal status of Tip24, Fluxx, Any-bet.com, etc. in Germany?
WH: From the legal perspective Tipp24, Fluxx (the lottery product is called "JAXX") and, for example, FABER are only providers for the state Lottery providers (which are all together organized under the "Deutsche Lotto - und Totoblock"). Under the premises that Tipp24, Fluxx and Faber fulfill the requirements of the procurement of State Lottery Services, they are considered legal under the State Lottery Treaty of June 2004. In the case of FABER, the Federal German Court already decided in March 1999, that the Deutsche Lotto-und Totoblock (the umbrella organization of the eleven state providers) could not forbid the organization of lottery-gambler pools. FABER provides a system, which offers the customer to participate in drawings of state lotteries in lager communities (gambler pools). According to this decision--and to the fact that the procurement of participations in state lottery drawings are regulated under the State Lottery Treaty Tipp24--Fluxx (Jaxx) and FABER are not considered operators. They are acting legally. In regard to the opening of the German Gambling in the aftermaths of the decision of the German Federal Constitutional Court of March 28, 2006, those service providers might seize the chance to expand their services towards their own lottery organization.
IGN: What is the status of the German betting TV channels, such as Premiere, RTL, DSF, etc?
WH: Most of the channels, like Premiere or DSF, are working with GDR-licensed operators ( e.g. Betandwin.de). At the moment, they are only procuring gaming services on behalf of those legalized operators. If the German Federal Constitutional court decides in favor of a (partial) liberalization of the gaming market, I expect the betting TV channels to start their own betting operations. Channels like RTL or DSF have already started to realize an own operation.
IGN: How is it having such a close legal cooperation with your brother?
WH: First of all, Claus is two years older than me. I am just ahead with my experience as gaming lawyer. My brother and I always had the dream of founding our own firm. We are perfectly happy with the fact that business-wise we complement we each other and that on private bases we are best friends with the consequence that we (can) trust each other 100 percent. Of course, there are moments when we fight with each other--back in time with fists and nowadays with words. . . . And our coworkers are very happy with this construction.
IGN: What is your favorite pastime?
WH: Spending the money my firm earns. ;-) Seriously, I am a keen tennis player and like to travel, as much as my career allows. I love the nearby mountains, to mountain bike and in the winter to ski. And in April I will test Dubai's indoor and sand ski slopes. I will actually visit my oldest brother Marc, who's working for the Dubai International Financial Center.
IGN: What irritates you most in the gambling industry?
WH: Well besides journalists . . . the "Chicago 1930" mentality of the state gambling operators.