The Placanica decision on Germany

[Newsflash]

Gambling Law Debate, 08.03.2007

The Placanica decision on Germany

“The decision exclusively concerns the legal situation in Italy“ responded Deutscher Lotto- und Totoblock, the cartel of the German state operators, when it read the Placanica decision, pronounced by the European Court of Justice (ECJ) on 6 March 2007. According to representatives of Deutscher Lotto- und Totoblock, the ECJ had not decided on the German gaming monopoly, so that the Interstate Treaty on Gambling could be implemented as planned.

The state operators have demonstrated a fundamental misconception about the role of preliminary rulings, in the course of which the ECJ does not judge “Italian cases“, but interprets Community law in a binding way as to ensure the uniformity of Community law. The requirements for the justification of the infringement of the freedom to provide services and the freedom of establishment regarding the cross-border provision of sporting bets as laid down by the ECJ are also, of course, directly applicable in Germany and are therefore to be observed by all German authorities and courts. Consequently the decision has an equal impact on the German gaming monopoly, even though the admissibility of such monopolies was not the subject matter of the case (in this regard there are two cases pending before the EFTA Court).

With the Placanica decision it has become clear that the internal market cross-border provision of sporting bets from one EU Member State to another must not entail criminal punishment in the receiving state. According to the clear guidance of the ECJ, criminal law must not infringe the basic freedoms granted by Community law. Thus agents transferring sporting bets from Germany to state licensed bookmakers in other EU Member States may no longer be criminally prosecuted in Germany. Also the German authorities must no longer prohibit cross-border provision of betting services. Thus the German sports betting market has effectively opened for operators from other EU- and EEA Member States.

In view of this situation, it probably does not make much sense to maintain the betting monopoly in Germany. Because they offer unattractive and uncompetitive services, when compared to those of private operators, the state operators offering sports betting under the trade mark “ODDSET“ will likely continue to lose market share. The political discussion is only about to start in Germany, as the planned Interstate Treaty on Gambling obviously is not feasible anymore. On 6 March 2007, the Christian Democratic Party (CDU) of Schleswig-Holstein already introduced an alternative draft for an Interstate Treaty which allows private operators to apply for a license.

Martin Arendts, Attorney-at-Law, M.B.L.-HSG

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