German lander Schleswig-Holstein’s draft gambling law has been ruled compliant with EU law. With the European Commission’s seal of approval, the law now returns to the state parliament for a second reading and final vote. If no vote occurs before legislators break for summer, things will have to wait until parliament reconvenes in September. However, if the law does pass a vote before the break, Schleswig-Holstein could have a licensing regime in place as early as this fall.
Under Schleswig-Holstein’s draft law, operators would pay a 20% gross profits tax and no products would be off limits. The proposed scheme in the other 15 German states would allow only sports betting and charge a 16.66% turnover tax. That last figure was the iceberg that nearly sunk the HMS Pwin on its maiden voyage on the London Stock Exchange. The State Treaty proposal has been widely panned, and H2 Gambling Capital estimated it would have captured only 7% of Germany’s overall online gambling market.
Small wonder than, that bwin.party (Pwin) people are overjoyed by Schleswig-Holstein’s European Commission report card. Director of corporate communications John Shepherd told eGaming Review that he was “encouraged” by the development, seeing it as “a clear signal to the other 15 federal states that Schleswig-Holstein was moving in the right direction. Shepherd confirmed that Pwin would be applying for a license, as will Betfair.
Weeks prior to the EC announcement, Pwin co-CEOs Jim Ryan and Norbert Teufelberger spoke at length with eGR’s Stephen Carter. (Read the full article here.) Both men praised Schleswig-Holstein’s approach, and also predicted the other German states would soon fall in line. In explaining his position, Norbert noted that “the current state treaty implemented a total internet ban, payment restrictions and ISP blocking.” Despite these restrictions, Bwin continued to derive 25.5% of its pre-merger revenues from the German market. Norbert didn’t specify how all those Euros manage to get around those pesky state treaty payment restrictions every quarter. Just really smart, we guess.
Neither Norbert nor Ryan saw any reason to pull out of Germany. “As long as our lawyers tell us what are doing is compliant with the regulatory framework in this country then we will continue to operate.” No doubt PokerStars and Full Tilt’s lawyers told them much the same thing before April 15. Speaking of, both Pwin CEOs viewed the events of Black Friday as positive for their company, with Norbert somewhat gleefully suggesting that regulators in France, Italy and elsewhere could react negatively to PokerStars’ US troubles. (If Dana White is still looking for a replacement main event at UFC 130, we humbly suggest you throw Norbert and Isai Scheinberg into the Octagon. Norbert, at least, seems game for it.)
Anyway, it’s almost post time. Shareholders will have their first opportunity to act on the Schleswig-Holstein news. Will Pwin expwode off the blocks Wednesday morning? Could the surge help Pwin regain all the ground it has lost over the past month? With over 50p still to go to regain its April 4 peak, that could be a tall order. Still, this is the same bunch of shareholders who completely lost their shit when the other German lander broke their news, so who knows what the herd is capable of. On your marks… get set… INVEST!