German Gaming Market Hot Topics

Source: Weinert Levermann Heeg


The 2011/2012 Schleswig?Holstein legislation on Gambling

I. German Regulation and EU Case Law

In 2008¸ the 16 federal states of Germany agreed on a state treaty on gambling. Stipulating the state monopoly on gambling the state treaty had tremendous economic effects for all market participants. Organisation¸ communication and advertising of online gambling were prohibited by the treaty. The internet as a profitable channel of distribution was intended to be closed for the gambling industry. As a consequence¸ the treaty stimulated the growth of a grey market.

Ever since the European Court of Justice (ECJ) challenged its coherence in 2010¸ federal states have not been able to agree on a new treaty on gambling. A draft of a new treaty¸ passed by 15 federal states in the beginning of 2011¸ was met by a critical response of the European Commission forcing the states to re?negotiate it in essential points. In October 2011¸ the 15 states came up with a new draft (“E?15”).


II. Schleswig?Holstein’s Approach: Re?Adjusting Gambling Law; General Prerequisites

In September 2011¸ the federal state of Schleswig?Holstein ? rigorously implementing EU?guidelines – passed a liberal state gambling law (GVOBl. 2011¸ 280). The state law re?opens the legal market for private gaming providers¸ consequently distinguishing organization of gambling and its distribution¸ leaving the state monopoly of the former intact and liberalizing the latter. The gambling law contains a differentiated agenda of goals. While the paramount goal of the 2008 state treaty was to impede addiction to gambling¸ the Schleswig?Holstein law speaks of permitting gambling to a “moderate extend.” We witness a true paradigm shift (see Heeg/Levermann¸ MMR 2012¸ 20)!

In stark contrast to E?15 the number of concessions is not limited by the Schleswig?Holstein law. Following the principles of non?discrimination¸ the permit can be granted to citizens of the EU as well as to companies residing or holding a branch in the EU or the EEA¸ thus allowing applicants from third countries to participate. A prerequisite for receiving a licence for online distribution is the presentation of a bank guarantee covering the amount of 1 million euro.

While E?15 provides for a turnover?based taxation¸ Schleswig?Holstein’s progressive approach contains a gambling levy of 20 % of the gross gaming revenues¸ leaving private providers with proper return prospects.

Together with the liberalisation of sports betting¸ Schleswig?Holstein legalised live and event betting (“next goal?betting”). Online?casino games may be applied for as well¸ with the permission to hold bankholder games being subject to the state law on casinos (GVOBl. 1996¸ 78).

The permission to advertise gambling on all levels of media ? including TV and internet – means a true liberalisation in the online sector takes place. Advertising¸ however¸ has to keep the