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German monopoly on sports betting upheld in legal challenge

A legal request by an as yet unidentified German gambling group that it be granted an interim dispensation to accept bets as long as a lawsuit against state gambling restrictions is pending in a lower court has been rejected by the German Federal Constitutional Court in Karlsruhe, reports Bloombergs news service.

Although the ruling was based on technicalities, it will be disappointing for online gambling companies fighting the monopolistic protection afforded to state governments by the German Treaty on Gambling.

The unidentified plaintiff in case BVerfG, 1 BvR 2410/08 is fighting a 2005 order by the state of Lower Saxony that it stop taking bets offered by a Malta-based gambling company. The plaintiff, still awaiting a lower court action, asked to be allowed to accept bets as long as the lawsuit against the restrictions is pending. This week his case was rejected by the higher Federal Constitutional Court.

Ronald Reichert, who represented the plaintiff, commented: “This was just an interim ruling concerning preliminary procedures and its importance is limited to that. We expect the Federal Administrative Court to soon get the chance to fully scrutinize the rules in a new landmark sport-betting judgment.”

Reichert's firm represents several gambling industry associations and broker companies, but he declined to identify his client in the current case, revealing only that he is a businessman who has a betting shop in Lower Saxony.

“The court impressively backed the Germany gambling rules and clearly rebuffed the commercial sport-betting industry,” Erwin Horak, spokesman for the state monopoly Oddset, told Bloombergs in an e-mailed statement.

Interestingly, the same (Constitutional) court in 2006 struck down German’s former sports-gambling monopoly, saying the rules were inconsistent.

Germany’s 16 states then reinstated the monopoly and banned online betting at the beginning of 2009 in a state treaty. The ruling puts the country at odds with European Union regulators, who threatened to sue Germany in the European Court of Justice over the law last year.

“The new sports-betting rules have repaired the deficits of the old monopoly,” the court wrote in its current judgment, remarking that the preliminary assessment shows that the monopoly is constructed in “a consistent manner both in terms of law and fact to prevent gambling addiction.”

Betting firms like Bwin Interactive Entertainment AG, have been fighting protectionist gambling restrictions in Germany for several years, arguing that these are illegal under European Union law and invoking the Constitutional Court’s 2006 ruling. Several German courts have also sent cases to the European Court of Justice to look into the matter.

The companies are also arguing that the new German system isn’t consistent, because it bans private sport bets while allowing slot machines to be run by private gambling halls. The judges said today that its 2006 ruling doesn’t require the government to regulate slot machines and sport bets under an identical regime.

Source: InfoPowa News

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