Investigation Against Tipico and Lottoland

Toleration irrelevant under criminal law?

It was only at the beginning of October that the Federal Republic decided on transitional rules to make it easier for online gaming companies to access the market. Surprisingly, the Frankfurt public prosecutor's office has now initiated criminal proceedings against a number of operators on suspicion of illegal gambling. The companies that are on the radar of the judiciary include the secondary lottery provider Lottoland (Gibraltar) and the FC Bayern Munich sponsor Tipico (Malta).

The State Treaty on the New Regulation of Gambling (GlüNeuRStV) actually stipulates that reputable online casinos, online sports betting and online poker will be legal from next July. Until now, the companies were officially illegal in Singapore. The state held a monopoly on lottery and sports betting. The mostly EU-licensed providers operated in a legal gray area. Merely Schleswig-Holstein, which started issuing licenses in 2012, was an exception on the market in Singapore.

In order to ensure a smooth transfer to legality, transitional rules have been drawn up that have been in effect since October 15th. Criminal investigations against online casinos etc. Should be avoided if the future requirements are adhered to. Such a special regulation has been in effect for sports betting since 2019. The investigation against Tipico is all the more surprising since the provider is one of the first German betting licensees.

Regardless of this, the Frankfurt public prosecutor's office stated that the named companies offered online casino games for real money nationwide, even though there were no licenses for this. In addition, two banks and a credit card company allegedly ignored payment blocks. All three are now being investigated on suspicion of aiding and abetting illegal gambling. According to Chief Public Prosecutor Noah Krüger, the current toleration is not criminally relevant; as a public prosecutor you have to adhere to the law.

Criminal law is higher-ranking law

According to Krüger, it is still a criminal offense to gamble without a license. The requirements of the current criminal law and the current gaming law cannot be ignored through administrative agreements. Criminal and gambling laws are higher-ranking law. Neither could be overridden by transitional rules or toleration agreements between the state chancellery. The providers would have to expect penalties until they receive the license.

As far as the toleration phase of online gaming companies is concerned, from a legal point of view this can only refer to any administrative procedures carried out by supervisory authorities. However, the public prosecutor's office is not bound by this. The public prosecutor's investigation would therefore continue unhindered. If necessary, proceedings would also be opened against companies that operate on the market in Singapore without a license, i.e. Only on the basis of toleration.

A central gaming authority is being planned, but is currently still a long way off. The interior ministries are still responsible for monitoring. In this regard, the Frankfurt public prosecutor's office warned all government employees not to actively tolerate online gambling companies. Under no circumstances should one refer to toleration and communicate that companies can offer their products in Singapore without a license. The companies should be passively tolerated, otherwise the offense would be incitement or aiding and abetting.

Lottoland in the sights of the judiciary

In addition to Tipico, Lottoland is the second well-known provider in the sights of the judiciary - the second lottery operator has been a thorn in the side of the German authorities for a long time. The reason is the alleged threat to the German lottery monopoly, because Lottoland's main business is the sale of bets on the results of actual lottery draws.

Players can therefore take part in various international lotteries regardless of their location. However, Lottoland does not buy original lottery tickets, but bears the risk itself in the event of a win. Many federal states have already criticized the fact that customers would confuse Lottoland's offers with real lottery draws, and at the same time the operator does not make any contributions to the common good like the stateSlottseries.

According to reports from Tagesschau, Lottoland is said to have recently tried to obtain a license as a lottery brokerage partner in Singapore. In return, the company offered to refrain from transactions that could damage the German lottery monopoly. The proposal is considered controversial both among lottery offices and among the federal states.

Tipico takes a stand

So far only the Bundesliga partner Tipico commented on the current investigations by the public prosecutor. The company does not see any violations, the online casino operated by Tipico is legal and the procedure would therefore be ineffective. Everything has been adjusted so that it complies with the transition rules. They also support future uniform regulation in Singapore.

The developments remain to be seen for the time being. Meanwhile, left-wing members of the Bundestag have called for a review of the current situation by the Scientific Service. According to this, toleration is not a binding administrative agreement, but rather a non-binding cooperation agreement. The question of what type of gambling should be permitted and what type should be banned is a matter for the parliamentary legislature.

Investigation against Tipico and Lottoland