EU Commission questions compliance of German gambling regime with EU law

The detailed opinion confirms that there are real concerns with Schleswig-Holstein’s proposed switch from a transparent licensing model to one that is restrictive and opaque, raising further doubts about the overall compliance and consistency of the German gambling regime with EU law. Under Directive 98/34/EC, Schleswig-Holstein must not adopt its draft legislation before January 2013.

Schleswig-Holstein notified its proposed legislation to the Commission on 6 September 2012. The current detailed opinion, which has also received the support of Malta and the U.K, extends the standstill period until 7 January 2013.

The proposed alignment of Schleswig-Holstein’s gambling legislation with the GST marks an abrupt policy reversal. If confirmed, Schleswig-Holstein would move from a sustainable and EU-compliant licensing model introduced in 2011 to a prohibitive and restrictive model which bans online poker and casino, imposes an uncompetitive tax regime, and restricts the online sports betting offering to 20 licenses.

Sigrid Ligné, Secretary General of the EGBA, commented: “Schleswig-Holstein’s proposed move from a sustainable and EU compliant licensing system to an inconsistent and unjustifiably restrictive regime would be a significant step backwards, one that - as confirmed today - the European Commission cannot approve”.

The European Commission already confirmed its concerns about the non-compliance of the German gambling legislation with EU law in July 2011. Today’s detailed opinion shows the consistent position of the Commission towards Germany’s gambling reform.

The tendering procedure for the allocation of the 20 online betting concessions under the GST is currently managed by the state of Hessen and has already resulted in more than 100 applications but fails to provide the applicants with clear, transparent and reliable information on the criteria which will be used for allocating the 20 concessions.

Sigrid Ligné added “The European Commission’s detailed opinion against Schleswig-Holstein sends a clear message that Member States are no longer going to be allowed to impose gaming regulations that fail to meet the tests set by the CJEU. The German states cannot continue to ignore the warnings coming from Brussels and the growing criticism evidenced by the multiplication of complaints and litigation even before the new legislation is introduced. This creates an extreme level of legal uncertainty which is a damaging for all parties and German consumers in particular. At this stage, only the EC can restore legal security by acting on the many complaints it has received, not only against Germany, but also against Greece, Belgium and several other Member States.” 

The European Commission confirmed on 23 October 2012 in its Communication on online gambling that “ensuring compliance of national law with the Treaty is […] a prerequisite of a successful EU policy on online gambling”1 and that it would take action against all Member States whose legislation does not comply with EU law.