German court upholds ban on lottery betting
Judge dismisses claims that ban infringes on EU laws
A German court has dismissed an appeal made by an unnamed Gibraltar-based operator to overturn a ban on lottery betting in Germany.
Judges at the Higher Regional Court of Koblenz, in the German state of Rhineland-Palatinate, upheld an earlier district court ruling in July which barred the lottery betting operator from offering services to German customers.
In its appeal the lottery betting operator asserted that it offered lottery-based gaming and as such was permissible under the German gambling laws.
However, the court sided with the earlier ruling that so-called ‘secondary lotteries’ are not technically lotteries under the definitions contained within the German Interstate Treaty on Gambling.
Judges argued that only so-called ‘primary lotteries’ were legal because they have a direct role to play in the outcome of draws, while secondary lotteries are solely dependent on the outcome of the primary lottery operators draws.
Qualifying this, the ruling asserts the event decisive for the win on lottery betting is beyond the control of the betting provider and any decision on profit and loss made by the lottery betting operator depends on the implementation and the outcome of the primary lottery.
The ruling was upheld despite claims by the Gibraltar-based firm that the ban violated EU laws in respect of preventing the flow of goods and services between member states.
Dismissing this assertion, judges argued that EU laws allow member states to impose restrictions where it “serves the legitimate concern of combating gambling addiction and preventing the participation of adolescents in gambling,”.
The ban came following a complaint by German state lottery and sports betting operator Lotto Rhineland-Pfalz that so-called unauthorised competition from these firms had reduced its 2017 sales by almost 7%.
A spokesperson for Lottoland said the ruling would have no impact on its German lottery betting business.
“The German gambling regulation is in contradiction with European Union law and we offer our services in Germany based on official licences issued by Malta and Article 56 TFEU,” the spokesperson said.
Elsewhere in Germany, the new licensing regime for sports betting operators in Germany could be under threat following the issuance of a so-called ‘blue letter’ by the European Commission.
In the letter, which has been sent to the German federal government, the Commission criticised the decision by German authorities within the amended Interstate Treaty to shorten the validity of licences from the previous seven years to 18 months. The reduction in licence term was made to allow for the potential establishment of a new regulatory framework for sports betting in all states by 2021.
Under the amended treaty, if all 16 states fail to agree a new framework within this timescale, the licences can be extended to 2024.
However, the EC has said this reduced licence term would increase the size of the German black market by reducing the incentives for operators to switch from unregulated to regulated offerings.