BUSINESS

European Union’s top court says Germany can’t prosecute sports betting operators

TAGs: CJEU, European Court of Justice, Germany

germany-sports-betting-european-union-court-justiceThe European Union’s top court has issued an opinion that says Germany can’t prosecute unauthorized sports betting operators because the country’s gambling regulations run contrary to European law.

On Thursday, the Court of Justice for the European Union (CJEU) released an opinion by Advocate General Maciej Szpunar in the case of Sebat Ince, a Turkish national residing in Germany.

Ince ran a ‘Sportsbar’ which provided technology that allowed German bettors to connect with a Malta-licensed online betting operator. German authorities wanted to prosecute Ince for taking bets without a license but a Bavarian court asked the CJEU to rule whether the prosecution violated EU prohibitions on the restriction of trade.

Germany passed its federal interstate treaty on sports betting in 2012 and issued 20 online betting licenses in 2014 following a widely criticized application process. However, court challenges by rejected applicants have prevented the licenses from taking effect and the European Commission is currently considering whether to launch infringement proceedings against Germany due to its suspicion that the regime is incompatible with EU law.

Szpunar’s opinion can be read here, but in a nutshell, the ruling says Germany can’t prosecute private betting operators operating without a license because the chaotic and inscrutable tender process that capped the number of available licenses at 20 had failed to live up to EU standards of transparency.

A full ruling by the CJEU on Germany’s licensing regime is expected later this year. The German Sports Betting Association (DSWV) issued a statement saying it hoped Szpunar’s opinion would be enough to convince the German government to convene meetings with stakeholders to create a “fair and legally compliant” gambling regime.

HESSE RULING STICKS FORK IN LICENSING PROCESS
Earlier this week, a court in the German state of Hesse rejected the appeal of an earlier ruling that prevented the issuance of those 20 sports betting licenses. The Hessian Administrative Court upheld a lower court’s ruling that the ‘Gambling College’ that was established to vet the license applicants represented neither the federal nor state governments, creating, in effect, a third unaccountable level of government that the court called a “breach of the principle of democracy.” Ouch.

The Hessian court also determined that this Gambling College had disproportionately favored German companies over equally qualified firms from other EU member states when it came to deciding who made up the lucky 20 license recipients. The Court concluded that Germany would be far better off forgetting the whole sordid episode and starting the process over from scratch. Amen.

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