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Hesse will break from gambling State Treaty if regulatory impasse continues

The Interior Minister of the German state of Hesse, Peter Beuth, has reaffirmed his commitment to fighting for an overhaul of Germany’s gambling laws, arguing that an end to the current licence cap and product restrictions is the only way to ensure a functioning market.

Beuth said that selective changes to the existing State Treaty on Gambling, which currently favours certain states, will not resolve the legislation’s fundamental problems. Hesse may strike out on its own to establish a viable framework if these fundamental problems continue to be ignored, he said.

He picked out the Treaty’s quantitative aspects as a key stumbling block that has prevented a single licence from being issued.

“These restrictions on providers do not do the market justice and unsuccessful applicants have launched a wave of litigation that has brought the process to a halt,” he explained. “This has meant that the State Treaty’s major objectives such as fighting gambling addiction, protecting consumers and protecting minors cannot be enforced.

“In future the following must apply; if you stick to the rules, you should be able to offer sports betting. Therefore qualitative [not quantitative] standards must be applied.”

Beuth does not believe that increasing the number of sports betting concessions from 20 to 30 or 40 will solve the problem, because unsuccessful bidders will still complain about such “arbitrary” restrictions. He notes that 79 sportsbook operators are already paying taxes in the country.

“The State of Hesse cannot and will not agree to change the State Treaty on Gambling unless the most pressing shortcomings are eliminated,” he added.

Beuth argues that a “holistic approach” must be found, perhaps one based around Hesse’s proposals to end the restriction on the number of licences and legalise casino and poker games alongside sports betting, with a new federal regulatory body to replace the Glücksspielkollegium.

These proposals were put to Germany’s Council of Minister-Presidents earlier this year, only to be rejected in favour of what many believe to be superficial changes to the legislation such as doubling the number of permitted licensees.

Beuth warns that Hesse could be forced to break from the State Treaty should the majority of states pursue an illegal regulatory model instead of a framework that is legal under German and European Union law.

“Hesse cannot and will not be forced into recognising an unlawful treaty,” he said.

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