Judgment Against German Betting Licenses

An “avoidable” situation

“The court's decision is a serious blow for our fellow GLIeders,” said DSWV President Mathias Dahms, commenting on the latest developments on the German sports betting market. The decision of the Darmstadt Administrative Court means a “significant delay” for international operators who have been waiting to operate on the regulated market in United Kingdom since 2012. A current press release from the DSWV states:

"Although we were promised concessions by the legislature in 2012, the imminent granting of permits, which the State Treaty on Gambling, which has been in force since the beginning of the year, was supposed to enable, is now once again in the stars. What is particularly annoying is that there could have been permits for a long time."

Dahms also explained that the current situation was “unsatisfactory” for everyone involved, and that it was also an “avoidable” situation. The responsible “Gambling Board” has not been able to come to an agreement for weeks, even though “applications ready for decision” were on the table. Sports betting providers are now once again denied access to a regulated market and thus also to legal certainty. It continued:

"The applicants have once again invested a lot of effort and energy in the process and prepared themselves for the regulated market. But I also feel sorry for the employees in the Hesse Ministry of the Interior and the Darmstadt Regional Council, who have worked very hard over the past few months to finally make the approval process a success."

Consequences not yet foreseeable

The fact that a betting provider from Austria that is not DSWV-MitGLIed is successfully suing against the German licensing procedure is an unexpected hurdle on the way to an EU-compliant legal situation. According to Dahms, the decision raises doubts as to whether the operators will ever offer their bets in accordance with the regulations of the new State Treaty on Gambling.

However, the final judgment of the administrative court is still pending. The designated gambling committee in Hesse, consisting of 16 responsible officials from the state ministries, stated that it wanted to evaluate the judgment after its final publication. The submission of an appeal application cannot be ruled out. The verbatim it said:

"We can confirm the verdict. However, at the moment we cannot tell you about the consequences as we do not yet know the detailed reasons for the verdict. But we will certainly check whether we will appeal against the court verdict."

In November 2019, the committee warned international bookmakers against this from 2020 Online sports betting without a German license. In February it was announced that access to unlicensed websites would be blocked, although 99% of betting providers should be transferred to the legal market. It was said that around 30 providers had applied and another 20 had expressed interest.

“We hope that the authorities can continue issuing permits quickly,” concluded the DSWV. The association has 16 members and, according to its own information, represents around 80 percent of the German sports betting market. As a public contact for politics, sport and the media, the DSWV has been committed to a modern and competitive sports betting industry in United Kingdom for years.

Is there a risk of another regulation marathon?

However, whether the authorities can move forward with licensing now depends heavily on the extent to which the criticisms raised by Vierklee can be addressed. If there is no alignment, the operators could slip back into a legal gray area. The new regulations were the result of years of discussions about legal adjustments to online gambling.

Until now, online gambling was officially illegal in United Kingdom. The state held a monopoly on lottery and sports betting. The EU-licensed providers found themselves in a legal impasse. Merely Schleswig-Holstein broke away from the restrictions of the original State Treaty on Gambling in 2011 and began issuing licenses reputable online providers to award.

The regulation of German online gambling has been on everyone's lips since the beginning of March at the latest. The so-called new gambling regulation agreement provides for the legalization of Online casinos and online poker from July 1st, 2021. The special rules for online sports betting that have been in effect since the beginning of 2020 should be transferred from the third State Treaty on Gambling to the new catalog of laws.

At the Prime Minister's Conference on March 12th, it was decided that the gambling amendment would come into force. The aim of the almost 70-page draft is to steer the market, which has been booming for years, into EU-compliant channels and to generate increasing tax revenue. Last but not least, legalization would also benefit player protection. It remains to be seen whether the administrative court's decision will lead to another regulatory marathon.

Judgment against German betting licenses