Germany To Ban Online Gambling January 1

Germany will ban online gambling effective January 1, 2008. 13 of the 16 German states have already ratified an accord that will keep in tact the country’s state monopoly for lotteries and most other forms of betting. According to a Heese government spokesman,

“That’s the required majority and we expect to have all the rest coming in by New Year’s Eve.”

The question now becomes, how long will this law stay in effect.

In mid December, all state legislatures voted to approve the new law which was negotiated after the Federal Constitutional Court rules last year that the formal model was unconstitutional. Bwin Interactive Entertainment AG, Fluxx AG and Tipp24 AG have been highly critical of the new rules that will not expire until 2011.

The new rule defines illegal gaming as anyone betting within German territory over the internet with a company not based with Germany. It will also make it illegal to advertise gambling on television or over the internet. Print advertising and other forms of advertising will no longer be allowed to invite players or prompt them to action; they can only inform that it is possible to do so. The regulations also give states the right to order ISP’s to block web sites that violate the new rules and also order banks to stop money transfers to them.

Some of the online gambling companies are not worried though. Tipp24 stated that they don’t foresee and threat to their existing business model mainly due to the fact that they do not expect the new regulations to hold up in court. The company released a statement and in it stated that they believe the regulations are,

“…clearly contrary to law and will sue for its rights if necessary.”

Bwin’s license was issued under the East German government before unification and has another portal under a Gibraltar license. They believe that the licenses should take precedence over the new regulations and plan on continuing their operations as normal. Bwin already has a case pending from Oct 30th when they sued 4 German states seeking to continue offering their online gambling services after the new rules become effective.

In an interview earlier this month, Bwin spokesman Hartmut Schultz said, “We think that in the second half of 2008 the European Court of Justice will have stopped this futile effort to keep us out of Germany.”

In April, the European Commission’s request to Germany to reconsider the new regulations saying that they were “disproportional” was rejected as Germany says they are only trying to protect German citizens from the dangers of gambling. (4Flush note: Interesting commit since German’s gambling with German companies are not effected by new regulations)

It was on December 20th that Wolfgang Kubicki, leader of the FDP opposition party in Schleswig-Holstein’s Parliament, said in an interview that,

“I am pretty sure the commission will escalate the process and send a formal warning the day after the new law takes effect. Berlin will have something in the mail on Jan. 3.”

The European Commission does have the authority to sue members and force them to comply with current European Union law.

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