Tuesday

31st Mar 2020

EU court strikes down Germany's gambling monopoly

  • German gambling monopolies don't limit addiction, says the ECJ (Photo: Flickr.com)

In a landmark ruling that may "ruin" German state lotteries and bring in big gains for private betting companies, the EU's top court said that the current state monopoly on gambling is "unjustifiable" and in breach of EU law.

The European Court of Justice in Luxembourg said on Wednesday (8 September) that Germany had undermined its consumer-protection argument by letting state-run gambling companies engage in "intensive advertising campaigns" and by permitting a proliferation of automated gambling machines, which the court said were highly addictive.

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"In such circumstances, the preventive objective of that monopoly can no longer be pursued, so that the monopoly ceases to be justifiable," the court said.

The top court also said Germany's national legislation on gambling is "contrary to the fundamental freedoms of the EU" and its provisions "cannot continue to apply during the time necessary to bring it into conformity with union law."

Under a bill adopted in 2008 and aimed at limiting gambling addiction, only state-run companies were allowed to offer lottery and betting services in Germany, bringing billions of euros to the state coffers.

Eight online gambling providers challenged this law in several regional courts, which in turn asked the ECJ whether the German system was legal.

The ECJ ruling was met with "surprise" on the part of the state lotteries, because the ECJ had already ruled that such monopolies in a number of other EU states are legal because they are aimed at limiting the social impact of gambling.

"It's a disaster ... If we don't get this thing fixed, our very existence is at stake," said Rolf Mueller, president of the sports federation of Hesse state, reports Deutsche Presse Agentur. Eighty per cent of the group's running costs are paid by the state lottery commission.

The other camp hailed the decision as a "landmark ruling" that "signals the end of the German online gaming ban", Sigrid Ligne, head of the European Gaming and Betting Association, said in a statement.

However, European Lotteries, a lobby group for national lotteries in 40 countries, disputed whether the ruling would open up the German market.

"On the contrary," the group said in a statement, "the court reminded Germany that it has to control more strictly the offer of dangerous forms of gambling such as casino games and gaming machines.

"The court pointed again to the higher risks associated with internet gambling."

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