The European Court of Justice’s (ECJ) long-awaited ruling on
the compatibility of Germany’s State Treaty on Gambling with European Union law
has seen the body condemn the legislation as contravening key principles of
European Union (EU) law.
Centring on the case of Sebat Ince, an Austrian prosecuted
for illegally facilitating online gambling in Germany, the ECJ has ruled that
Ince cannot be prosecuted under the terms of the 2008 State Treaty. It has also
come to the decision that as a result of a lack of transparency and the
continued presence of what amounts to a lottery monopoly in the market, they
are equally exempt from prosecution under the revised but equally controversial
Ince was originally charged with violating the terms of the
2008 Treaty early in 2012 – despite that legislation expiring in 2011 – and the
2012 Treaty once that came into force in July that year.
This second part of the ruling is widely seen by many,
including operator body the German Sports Betting Association (DSWV), as
confirmation that the State Treaty does not comply with European laws, paving
the way for a total overhaul of the country’s gaming laws.
The court explained that the freedom to provide services
prevents an EU member state from penalising the unauthorised mediation of
sporting bets where the company or individual needs to secure a licence via a
procedure that "does not observe the principles of equal treatment and
non-discrimination on grounds of nationality and the consequent obligation of transparency."
In certain cases, such as this particular case, the system’s
flaws mean that despite provisions being put in place permitting private
operators to obtain licences, there is still in effect a public monopoly in
place, contrary to EU law.
This is not altered by the fact that the State Treaty is
"experimental" legislation, designed to be enforced for a set
period before being reviewed.
"The Court notes in this regard that the experimental
clause has not remedied the former public monopoly’s incompatibility with the
freedom to provide services in so far as, regard being had to the fact that no
licence has been granted and that public operators may continue to organise
sporting bets, the former regime has continued to apply in practice despite the
entry into force of the 2012 reform," the ruling explains.
DSWV president Mathias Dahms has greeted the ruling with a
call to action, urging the German authorities to totally overhaul the
"Today proves once again that the State Treaty on
Gambling violates European law," he said. "It is now no longer
sufficient to continue trying to repeat failed concepts. It is time for a
fundamental reform of gambling regulations in the federal states."
Dahms noted that the past three incarnations of Germany’s gambling
laws have all been declared in contravention of European Union law.
He added that amending existing laws would have no effect:
"Simply raising the number of sports betting licences will not resolve the
basic design flaws of the Treaty. Instead we need to constructively discuss a
comprehensive revision of the laws."