January 30th, 2008 was a good day for the young State Treaty on Gambling advocates. This Wednesday, the European Commission sharply attacked this Treaty; the VG of Schleswig also believes that the Treaty is violating EU laws and has decided to direct questions referring to EU law issues in context of the new sports betting monopoly to the European Court of Justice.

The hearing in Schleswig had connection with the law suit that an online sports betting provider had filed based in Gibraltar, represented by Hambach & Hambach Law Firm, is also seeking for the acknowledgement of his EU licence for the German Federal State of Schleswig-Holstein, as he can appeal to the European freedom to provide services.

The background: According to the ECJ, the freedom to provide services requests for offers provided on the gambling market as well. Though, restrictions to this freedom are possible, provided they pursue general interest goals and provided the measures taken are appropriate and proportionate. The objectives stipulated in the State Treaty on Gambling such as the protection of minors are invoked by The Federal State of Schleswig-Holstein. According to private sports betting company the Treaty most of all is intended to protect the Federal States’ fiscal interests, and therefore cannot make a systematic and consistent regulation. The new regulation doesn’t affect especially the area of slot machines, which is particularly relevant in connection with addiction issues. The Treaty lacks consistence, as German Federal legislation liberalizes (Internet) horse race betting. Also, in accordance with the Deutsche Hauptstelle fur Suchtfragen survey, the addiction dangers of lotteries is 0.0 percent. Lawyer Ms. Munstermann affirms that “a monopoly cannot be justified by reasons of player protection if the danger is nearly zero in the monopolised areas and if simultaneously gambling offers which really do present dangers are being liberalised.” Lawyer Dr. Wulf Hambach adds that The VG of Schleswig referral to the European Court of Justice is a consistent and correct decision.

The VG of Schleswig requests the European Court of Justice if it is possible to place consistent and systematic restrictions of the sports betting market, when the State Treaty on Gambling does not include areas relevant concerning addiction such as slot machines in the scope of application.
(Source: the VG of Schleswig Press release, 30 Jan.2008)

The European Commission obviously shares the VG of Schleswig concerns, and makes the following consideration in the press release dated 31 Jan. 2008. It says that online horse race betting is not prohibited in Germany; slot machines are widely expanded. More than that, gambling advertising by mail, on radio and in the press is still allowed.

The ECJ has stated earlier that any restrictions which seek to defend general interest objectives, for example the protection of consumers, must be ‘consistent and systematic’ in the way they try to limit activities.” (Source: Press release of the Commission IP/08/119 Link: http://europa.eu/

The State Treaty on Gambling that came into force only one month ago was stricken a body blow. The Treaty will not only occupy the European Commission in infringement procedures, but also the European Court of Justice thanks to the national courts referral. January 30th, 2008 will possibly not have been the last Black Day for the young monopoly. It may be the beginning of the end of the new State Treaty on Gambling.