European Court of Justice strengthens German gambling regulation

The ruling strengthens the nation states of the European Union. The judges decided that freedom to provide services may indeed be restricted in the case of gambling. The EU states may ban online gambling services because different and more severe risks of fraud apply to online gambling.

The object of the case (C-42/07) brought before the ECJ was the legal regulation of sports betting in Portugal. The specific matter at hand was the legitimacy of a law which grants the sole right to offer lottery and sports betting services in Portugal to a non-profit organisation. According to the ECJ ruling, the member states may decide for themselves how to regulate this industry.

The gambling authorisation granted in one member state does not have to be recognised by the other member states. As such, foreign sports betting will remain illegal in Germany. The European judges had already stressed repeatedly in recent years that restrictions in the gambling industry may be legitimate for overriding reasons in the public interest such as the protection of consumers.

The German Federal Constitutional Court had also thoroughly examined and confirmed the legitimacy of the Interstate Gambling Treaty on 14 October 2008 and 20 March 2009. “There are no longer any remaining doubts at all over the legitimacy of the German Interstate Gambling Treaty in terms of European law. I am very optimistic about the German cases which are still awaiting resolution,” said Erwin Horak.

“Today’s decision is another signal to the federal states that they are on the right track. The ruling is also a heavy blow for the commercial gambling industry. As of today, there is no longer any hope for an unregulated gambling market which has no borders and is oriented solely towards the profits of illegal providers,” added Horak.