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Online Gambling and Betting - Part 3


Rechtsanwalt Michael Terhaag, LL. M.

Fachanwalt für IT-Recht
Fachanwalt für gewerblichen Rechtsschutz

Online betting in the European Union

...Will the iron curtain fall?

by Rechtsanwalt Michael Terhaag and Rechtsanwalt Volker Herrmann (english version)

Online gambling and betting seems to the never-ending success story of the internet. For many years the legal ground for sports betting and other online gambling offers in Germany was clear. Only the lucky few holding an official german licence were allowed to offer these lucrative games. But suddenly the legal discussion around this topic has come into full swing.

That swing began to develop rather curious: a betting company from Berlin advertised for online betting in the famous “Auf Schalkeâ€? stadium. But the city of Gelsenkirchen found that to be illegal and the administrative court ruled that a company with a licence issued in Berlin may not advertise in Gelsenkirchen. One should note at this point that Gelsenkirchen is, of course, not part of Berlin and falls under the legislation of North Rhine-Westphalia. It seems that the court has learned its geographic lessons, but why should a company holding a german licence (from Berlin) not be allowed to advertise all over Germany?

In November 2003 the European Court of Justice changed the legal situation. In the Stanleybet matter “Italy vs. Gambelliâ€? Signore Gambelli had to face criminal charges before an Italian court. Gambelli was commissioning sport bets in Italy for a company holding a proper licence in the United Kingdom what the Italian authorities though to be a criminal act. The Italian criminal court doubted that the section of the Criminal Code that gave the basis for these charges was consistent with European law.

The European Court decided that a member state that offers gambling and betting itself (like Italy) may not prohibit others from doing so without substantial reasons. This ratio will most likely be also applicable in Germany where Oddsett is a sport betting offer by state-owned Lotto-Totto and only few other licences have been issued as an aftermath of german reunification. The European Court´s arguments will surely effect future rulings of german courts.

The first german ruling on that issue became public at the end of November 2003. This ruling in favour of a foreign company holding no german but an austrian licence was given by the District Court of Munich. The ratio of this case is that an austrian licence is sufficient and no criminal charges can be laid against the austrian company in Germany.

The Munich Court made it clear that every member state has the right to set up legislation to fight compulsive gambling. But doing so the member state would either have to fully restrict gambling or accept licences from other member states as well. The Munich judges found that beside ethic reasons to restrict gambling it had to be considered that the fiscal interest of the state is evident.
Analyzing this stunning development there is much room for companies holding a licence from member states of the European Union like Austria and Great Britain to get ready for the german market. Of course, the rulings of the European Court and District Court of Munich do not automatically permit online betting in Germany and further discussions with the german authorities are much expected. Also licences from non-member states will most likely not be accepted by the german courts. But these landmark rulings are opening the doors for a more liberal market in the online gambling market.

The final whistle has not been blown and this exciting legal game might be decided on penalties one day (this time without Rummenigge, Littbarski or Kahn)...

For a german version click here. Hier gibt´s diesen Beitrag auch in deutscher Sprache.