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EC: German legal betting overhaul “not a viable solution”

TAGs: European Commission, Germany

european-commission-germany-sports-bettingThe European Commission has dismissed Germany’s latest plans to revamp its online gambling market as “not a viable solution.”

This week, German media reported that their country’s Prime Minister had received a letter from Brussels pouring cold water on the new State Treaty on Gambling agreed upon by the 16 German landër last October.

That treaty sought to lift the previous treaty’s controversial cap on the number of available sports betting licenses, which had generated successful court challenges from operators who failed to win one of the original 20 licenses, thereby preventing the government from formally issuing any betting licenses.

The new treaty called for all of the original 35 license applicants who’d proceeded to the second stage of the application process to immediately receive temporary betting permits, while other applicants would have to apply for full licenses that wouldn’t become active until 2018. This week’s letter from the EC deemed this solution anti-competitive.

The new treaty also called for German gaming regulators to study other European Union regulated markets to ascertain “the current actual development in the field of online casino offers.” The EC also found fault with this plan, calling on Germany to make a more decisive move to effectively regulate online casino activity to resolve the country’s “insufficient” consumer protection tools.

The Landërchefs are scheduled to meet next Thursday (16) to vote on the new treaty. The EC opinion will factor into the discussion but it’s anyone’s guess as to whether the states will be willing or able to reach consensus on how to respond. If they fail to act to the EC’s satisfaction, the EC will proceed with an infringement procedure against Germany.

The legal confusion that has engulfed the country since the last state treaty was approved in 2012 hasn’t stopped most operators from continuing to serve German punters, and most of these operators have continued to pay taxes on their German betting revenue just to stay on the good side of regulators.

Germany’s federal government recently announced that it had collected €307m in sports betting taxes in 2016, 28% more than in 2015, thanks in part to increased wagering on the Euro 2016 football tournament. While significant, the betting tax haul was dwarfed by the €1.5b the finance ministry collected in lottery taxes last year.

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