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Germany’s Draft Gambling Rules Need to Be Changed, EU Says

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July 18 (Bloomberg) -- Germany’s draft gambling rules can’t be adopted as planned because they violate European Union law, EU regulators said.

The European Commission said “Germany should not adopt the draft,” according to an e-mailed statement today.

Betfair Group Plc, a British online-gaming site, complained to the EU this month about the rules it described as “discriminatory and protectionist” because it would force them to pay a 16.67 percent tax on all stakes and would limit the number of licenses for private betting companies.

The betting treaty would overhaul the country’s state monopoly on sports betting and lotteries that was attacked as unjustified by the EU’s highest court in a ruling last year.

EU regulators wouldn’t give details on their objections to the German rules because they are still in talks with German officials. They said German authorities are expected to respond to the EU’s objections. A call to the German government press office wasn’t immediately answered.

Court Ruling

The EU Court of Justice ruled in September 2010 that Germany’s betting monopoly, which only allows state-owned companies to offer most sports betting, violates European laws because the German rules “do not limit games of chance in a consistent and systematic manner.” The online-betting ban was upheld on June 1 by Germany’s top administrative court, which said the rules were in line with constitutional and EU law.

The leaders of Germany’s 16 states last month delayed until October a decision on the draft rules, according to Kurt Beck, the prime minister of Rhineland-Palatinate. State premiers in April reached a preliminary agreement on the new rules.

The Brussels-based commission, the 27-nation EU’s executive arm, is responsible for checking whether national legislation complies with region-wide rules. EU Financial Services Commissioner Michel Barnier’s department is conducting a review of gaming laws across the region.

Betfair’s chief legal officer, Martin Cruddace, said the company expects Germany to amend the draft law “so that it genuinely caters for a competitive online gambling market in Germany,” according to an e-mailed statement.

“As a responsible operator committed to transparency and integrity, Betfair hopes to obtain a license in the newly regulated German market, and we view today’s action from the Commission as a significant step towards us achieving this goal,” Cruddace said.

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net.

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.

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