"The German Free State Bavarian (Bayern) betting monopoly for sports betting is not consistent with the constitution on the freedom of profession." So reads the first sentence of a controversial verdict that was delivered today by a German constitutional court.
The court decision states further that the state monopolies do not have an effective policy in place to prevent gambling addiction, but they have been given until Dec. 31, 2007 to change gambling laws and regulations.
According to ISFB, a German interdisciplinary research group, there are more than 180,000 persons addicted to gambling in Germany.
The President of the Court explicitly noted that this decision of the German constitutional court is in line with the previous European Court of Justice ruling in the Gambelli case. These ECJ rulings point to the important role of state gambling providers to prevent addictive gambling behavior.
Dr. Wortmann-- President of European Lotteries and President and CEO of the Westdeutsche Lotterie GmbH & Co. OHG (Westlotto), which is one of the 16 state-owned gambling monopolies in Germany-— stated, "The court has acknowledged the important role state providers (in this case ODDSET) can play in limiting the proliferation of gambling behavior."
The court also explicitly noted that private sports betting is not legal under the current legislative framework. European Lotteries notes that ODDSET has already communicated that it will now work to implement the conditions set up by the court as soon as possible.
European Lotteries, an association that represents 74 state lotteries, toto companies and other similar entities across Europe, are aware of the importance of these national rulings for the developments in the EU overall and have closely observed the case from the outset.
Dr. Winfried Wortmann spoke on behalf of European Lotteries at the hearing in the Bundesverfassungsgericht in November of last year, warning of the effects a possible liberalization of the sector in Germany could have on the gambling sector in the entire European Union.
European Lotteries emphasize that this decision proves again that gambling services are not a service that can be provided without proper forms of control and can be left to state providers.
As late as February this view had also been expressed in the European
Parliament Plenary vote on the Services Directive, where Parliamentarians voted to exclude gambling from the scope of the directive.
The German sports associations will be the first loser, since the court
will not allow anymore consumer advertising and promotion. The German sports betting firm ODDSET has already been in a downward spiral for a few years. So there will be less and less revenue for German sports available...
It all started with the plaintiff, Irene Katzinger-Göth, desired a gambling license for sport betting that is not restricted to horse races only. The German state allows private betting on horse races but not on other sports events that are reserved to state run companies. Katzinger-Göth took action against the free state of Bavaria in 1998. The administrative court of Munich, appellation court of Bavaria and the federal administrative court dismissed the action, so she brought the complaint to the Bundesverfassungsgericht (Federal Constitutional Court) in 2001. And now, 8 years later, on Mar. 28, 2006, the final verdict is in place and she will not get her desired sports betting license.
Many big Internet bookies hoped for a more liberal stance that would enable them to eat from the big gambling cake that is World Cup Soccer, but with this verdict that will be very, very difficult!
BetandWin.com Interactive Entertainment AG, the leading continental Internet operator, reacted to the verdict with the following statement: "We welcomed the verdict passed down today by the German Federal Constitutional Court. Both the German Federal Constitutional Court and the European Court of Justice are of the opinion that a monopoly is unconstitutional if it cannot be justified in the interests of the general public. In a press release published today, the Federal Constitutional Court ruled that the state monopoly of sports betting currently existing in Bavaria 'was incompatible with the basic right of freedom of occupation, reasoning that it had been established in such a way that it could not effectively combat (gaming) addiction in a manner that would justify the exclusion of private providers.'
"A constitutional situation could be established both by dependably setting up a betting monopoly so as to effectively help combat gaming addiction, and by allowing commercial operations by private betting companies in a legally standardized and controlled manner."
In its press release, the Federal Constitutional Court concluded that "if a state betting monopoly were to be retained, it must consistently have the objective of preventing betting addiction and limiting betting mania."
The Federal Constitutional Court has rightly strongly criticized the common practice in Germany and other EU member states of claiming on one hand that a monopoly was justified for the prevention of gaming addiction, while on the other permitting national lottery companies to aggressively advertise their product offerings. The conclusions of the German Federal Constitutional Court should also give the European Commission grounds to initiate infringement proceedings against several other EU member states that have also attempted to prevent private providers from entering this market.
According to the court, there are "also clearly fiscal reasons for offering ODDSET sports betting. Above all, however, these marketing efforts are not actively directed at preventing gaming addiction. On the contrary, in reality what we see is the profitable and effective marketing of a recreational pursuit that is fundamentally harmless. This is illustrated by widespread advertising in which betting is represented as a socially acceptable, or even positively regarded form of entertainment. The distribution channels used for ODDSET betting are not aimed at eliminating the risks of addiction either."
By charging its legislators with establishing a constitutional situation, Germany now has an opportunity to create a regulated, competitive market taking into account important issues such as security, transparency and control, whilst at the same time exploiting the full economic potential. This would enable Germany along with the United Kingdom and Malta to take a leading role in Europe in dealing responsibly with the theme of games of chance.
The verdict of the German Federal Constitutional Court will not have any impact on the sports betting operations of the BetandWin's German investment, BetandWin e.K.
With over two million registered customers, the BetandWin Group is the leading provider of online gaming products in continental Europe, and it has set a goal of becoming the world's leading address for sports betting, gaming and entertainment on the Internet. Operating under licenses issued in Austria, Germany, Gibraltar, Italy, Mexico, the United Kingdom and Canada, the company's subsidiaries and affiliated companies offer sports betting, casino games, soft games, and person-to-person applications via Internet and mobile telephone. BETandWIN.com Interactive Entertainment AG has been listed on the Vienna Stock Exchange since March 2000 (ID code BWIN, Reuters ID code BWIN.VI).