Betfair files German objection against amended draft State Treaty on Gaming

The London based betting exchange claims that new liberalisation plans recently drawn up by most of German’s regional governments do not go far enough and still aim to shelter local state monopolies.

The UK-listed company filed its complaint in Brussels last week asserting that the updated draft legislation still allowed for favourable treatment of incumbent state companies through concession requirements and selection criteria, which will see their monopoly effectively retained. Betfair also raised concerns about the turnover tax provision, customer betting limits of 1,000 euros per month, marketing restrictions and a lack of regulation of online poker and casino games.

All of Germany’s 16 states, collectively referred to as the ‘Lander’, with the exception of the northernmost of Schleswig-Holstein, agreed to draft a new treaty to regulate gambling last year following a ruling by the European Court of Justice that found the initial draft legislation created a monopoly and broke existing market access rules.

“The salient points of the European Commission’s detailed opinion have as of yet not been addressed,” said Martin Cruddace, Chief Legal and Regulatory Affairs Officer for Betfair.
“Under these current proposals, Germany’s new state treaty will be out of line and out of touch with fundamental European Union law.”

With the ‘Lander’ hoping to get its proposals approved by Brussels in time to be signed by regional political leaders on December 15, Cruddace called on the European Commission to ‘ensure that Germany complies with free market principles’.

As part of the amended proposal, the German states now envisage a lower tax rate and a wider number of market entrants, 20 as compared with seven, while Betfair, which is against a limit on the amount of concessions that can be awarded, stated that the plan would amplify the inconsistencies in German gambling regulation.

“Creating a regulatory regime which unjustifiably stifles competition and prevents private operators from offering consumers what they want inevitably lead to market failure. Expert legal, financial and political opinion has consistently been making this point to the Lander, though as of yet, other than in Schleswig Holstein, the message doesn’t seem to be getting through.” added Cruddace.