German sports betting license process still open after court challenge

The Darmstadt Regional Council has stated that it will continue to review and accept applications for German sports betting licenses. A recent court ruling by the Darmstadt Administrative Court had blocked the issuance of licenses.

The Darmstadt Regional Council was one of two entities tasked with vetting, processing, and accepting applications for sports betting licenses under Germany’s Third State Treaty on Gambling, Legal Sports Betting reports. This treaty, which went into effect on January 1, 2020, permits online and mobile sports betting throughout Germany but bans other forms of online gambling. Other iGaming verticals are set to become legal next summer with a new and more permanent law, which will legalize online poker and casino games beginning on July 1, 2021.

The court’s decision to block new licenses stems from a court case initiated by Austrian betting firm Vierklee, which contends that the licensing process of applying for a sports betting license in Germany was not transparent and non-discriminatory.

The operator claims that there aren’t clear criteria established about how a sports betting provider can qualify for a license and that the application process greatly favors German companies with prior experience in local online gambling. Vierklee also contends that the lack of a uniform date on which licensed online betting would go live in Germany is arbitrary and discriminatory.

While the court ruled in Vierklee’s favor to halt the granting of licenses, its ruling did not specify whether it overrules or invalidates the Third State Treaty on Gambling until the 2021 law goes into effect.

The Darmstadt Regional Council has already appealed the Darmstadt Administrative Court’s ruling with the Kassel Administrative Court, one of five federal Supreme Courts in Germany. While the lower court’s ruling prevents the Council from issuing new legal sports betting licenses, they can still review applications and prepare to issue them quickly in the event that its appeal succeeds. If the appeal fails, companies will still be responsible for all costs associated with the application process.

Despite the uncertainty surrounding the licensing process, over 50 betting companies have already applied for a sports betting license.

Last month, the German Sports Betting Association (DSWV) showed its concern about the Darmstadt Administrative Court decision, saying that the situation that had arisen was avoidable and unsatisfactory for all stakeholders.