Germany's State-Owned Sport-Betting Monopolies May Be Unlawful, Court Says
German rules that limit the offering of sports betting and lotteries to state-controlled monopolies aren’t justified as long as they’re applied in an inconsistent manner, the European Union’s highest court said.
“The German rules do not limit games of chance in a consistent and systematic manner,” the European Court of Justice in Luxembourg said in three separate rulings today. “In such circumstances, the preventive objective of that monopoly can no longer be pursued, so that the monopoly ceases to be justifiable.”
The cases are the latest in a series brought by betting companies including Ladbrokes Plc, Betfair Ltd. and Bwin Interactive Entertainment AG, disputing the legality of state monopolies that block them from operating freely across the 27- nation union. Previous EU court rulings on similar cases in Italy and Portugal said national gambling monopolies are legal if they meet policy goals like fighting fraud and gambling addiction.
To be justifiable, a public monopoly cannot itself “carry out intensive advertising campaigns with a view to maximizing profits from lotteries,” a 13-judge panel of the EU court said.
Moreover, Germany doesn’t apply the same restrictions to casinos and slot-machine games, which “carry a greater risk of addiction than games which are subject to that monopoly.”
The German rulings stem from separate disputes in several of Germany’s states over the authorities’ refusal to either grant sports-betting licenses to companies or for prosecuting people who offered the games in some states on behalf of operators registered in other EU countries.
Germany is among countries targeted by the European Commission, the EU’s executive agency over potentially unlawful gambling restrictions. Some nations, such as Italy, have responded to the regulator’s demands for change.
“This is a landmark ruling which will have a decisive impact on the much-needed reform in Germany,” said Sigrid Ligne, secretary general of the European Gaming and Betting Association, which counts Bwin among its members.
To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net
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