Northern German state liberalised rules for online gaming

"Over 90 % of online gaming is non-licensed at the moment, and this will allow us to bring some of that into the fold so we can protect players, regulate the games and generate licence fees," said Dirk Hundertmark, spokesman for the CDU in state parliament.

The new laws will come into force in January allowing new licences from March, cover exchange and sports betting, as well as poker and casino games with the exception of roulette, blackjack and baccarat.

The largely illegal German sports betting market is estimated to be worth at least 5 billion Euros (us$ 7.2 billion), and Hundertmark estimates the new rules will allow his state to bring in 40 to 60 million Euros in fees annually.

Bookmakers and gaming operators will now be able to apply for five-year licences that will require them to pay a levy of 20 % of their earnings to the state.  Germany's 16 states currently have an iron grip on the gambling market, but are in negotiations to award seven nationwide licences for sports betting companies from next year.

Shares in British online gambling company Bwin.party jumped almost 10 % and peer Betfair edged up 2.1 % following the decision.  Germany's Tipp24, whose shares rose more than 9 percent, said it would start offering lottery tickets online again from Jan. 1.

Companies including Bwin and Britain's GVC Holdings have said they would apply for licences in Schleswig-Holstein if the new laws were passed.  Under Schleswig-Holstein's plan, companies will avoid paying a 16.67 % tax on individual stakes that has been proposed elsewhere -- a levy that betting companies had criticised for making it impossible for them to compete against state-run operators.

"At best this represents the opening up of Germany to online gaming, in due course, on reasonable commercial terms. At worst it will greatly delay the introduction of a more restrictive regime," Numis analyst Ivor Jones said.

Both Bwin.party -- formed earlier this year by the merger between Partygaming and Austria's Bwin -- and Betfair told Reuters they intended to apply for licences in the state.

Betfair said it hoped other German states would now introduce similar legislation.
"We are now hopeful that the other 15 German States will make the regulated amendments to their proposed State Treaty, in order to bring it into line with EU law," it said.