A German regional court (Landgericht Köln) has decided that Europe's biggest betting operator, BetandWin, and its two co-CEOs are not allowed to operate in Germany or direct German wagers. Four months away from the start of World Cup Soccer in Germany, this could be a serious setback for the company, its shareholders and players.
Westlotto, the state games of chance monopoly in Nordrhein-Westfahlen and a member of the European Lotteries (EL), on Sept. 1, 2004 instituted legal proceedings against Gibraltar-based BAW International Ltd. (BetandWin) by applying for an injunction preventing BAW from offering and/or advertising games of chance and/or sports betting on the platform www.betandwin.com in Germany and to desist from using the terms "Supertoto" and "Supertoto XXL."
In its defense, BetandWin dealt extensively with the Gambelli judgment passed down by the European Court of Justice, with the advertising tactics of German betting providers in general and with the advertising behavior of Westlotto in particular. Westlotto had also instituted similar proceedings against other providers. At the first instance, the Regional Court of Cologne passed down its verbal judgment on Feb. 2, 2006, and its written judgment is expected to be delivered in a matter of days. The court has ruled in favor of Westlotto and is requiring BAW International Ltd. to disclose the gaming turnover achieved in the region of Nordrhein-Westfahlen.
Betandwin is confident, however, that the ruling will be overturned by a verdict on the EU level.
"As you know, a landmark verdict in Germany is still missing," BetandWin Head of Corporate Communications Karin Klein explained. "This landmark verdict will probably have impacts on the judgment of the Regional Court of Cologne. From BetandWin's point of view, the verdict of the Federal Constitutional Court dealing with the lawfulness of the German gaming and betting monopoly will be of significance in view of the fact that in April 2005, the constitutional court questioned the conformity of German law with European law, ruling as follows: 'However, the more difficult it becomes to predict criminal liability, the less justification there is for arguing solely for implementation in the public interest. This may be the case if the applicability of an act is questionable, for considerations of EU legislation, for example. In such a situation, in order for legislation to provide effective safeguards for fundamental rights, it is necessary to specify concrete risks to the public good over and above criminal liability.'"
Klein added, "Against the background of the Gambelli ruling, BetandWin stands for a legal environment which is characterized by a regulated cross-border competition."
BetandWin is of the opinion that the relevant German laws are not in conformity with EU legislation and, therefore, intends to appeal the judgment.
Klein said the company will go through all the instances of appeal if necessary. Further, should BetandWin incur any kind of financial loss whatsoever as a result of the judgment, the company reserves the right to claim damages from Westlotto.