Deutsche Telekom acquires Tipp3, targets German punters using Austrian license

germany-deutsche-telekom-tipp3German telecom firm Deutsche Telekom (DT) has taken a controlling interest in sports betting operator Deutsche Sportwetten (DSW) with an eye toward immediately becoming a player in the German online sports betting market.

On Monday, DT announced it had acquired a 64% stake in DSW, which operates the sports betting site under an Austrian gaming license. Tipp3’s former majority owners Austrian Sportswetten – which is majority owned by Austrian Lotteries and Casinos Austria – will retain a minority stake in DSW. No information was released as to the value of the deal.

DT has expressed an interest in joining the German sports betting party since September 2013 when it announced it would seek one of the 20 online sports betting licenses the German federal government was preparing to issue. A year later, DT was announcing plans to acquire a chunk of DSW, which was one of the lucky recipients of the 20 federal betting licenses.

Those 20 licenses have yet to be formally issued due to legal challenges launched by betting firms that were left out in the cold. But DT told German media outlet Die Welt that it plans to begin accepting German wagers before the end of March, relying on its Austrian license to justify its activity. DSW says its new site has no intention of ‘reinventing’ sports betting, but will focus – at least, initially – on a limited diet of football, basketball and Formula 1 racing.

Meanwhile, the fate of the rival licensing regime in the German state of Schleswig-Holstein (SH) is currently being decided by the country’s Federal Court of Justice, the Bundesgerichtshof.

Depending how the Bundesgerichtshof rules, operators holding SH licenses could win the right to legally offer services to gamblers in the other German states. The SH regime is far more expansive than the federal scheme, allowing not just sports betting but casino and poker verticals as well. The SH regime also offers a far more favorable tax system for operators: 20% of gross gaming revenue vs. 5% of betting turnover under the federal plan.

Last June, the Court of Justice for the European Union (CJEU) ruled that the two schemes were capable of co-existing, provided the more restrictive federal treaty didn’t broach European Union edicts on the restriction of trade and services. But in October, a referral from a Bavarian court prompted the CJEU to once again take up the question of the federal treaty’s legality. It has been nearly three years since the treaty was passed.