INSIGHT
GERMANY:
ENJOY THE SILENCE!
The regulatory environment in Germany is as good as it’s ever going to get for operators, marketers and
advertisers, writes Christian Mayer of Noerr LLP.
THE OVERVIEW I PROVIDED last
year of the current regulatory regime on
gambling in Germany was rather ambitious,
referring to an imminent Wind Of Change,
inspired by German band The Scorpions’
famous track. Continuing in this tradition,
the track that most aptly describes the
current situation for operators in Germany
is Enjoy The Silence by Depeche Mode. This
is because while I was hoping for a new era
in German gambling regulations, not much
has happened in the past 12 months, and the
situation today – combined with almost zero
enforcement actions – is probably as good as
it gets for the online gambling industry, and
one operators should take advantage of.
The tender procedure initiated in August
2012 to grant the online sports betting
licences is still a complete mess. After
more than four years, no licence has been
granted. In September 2014 the authority
announced its decision on the 20 fortunate
applicants, spurring numerous legal
proceedings and a number of judgments
by the competent courts, all in favour of
the unfortunate applicants that shouldn´t
been granted a licence. Overall, the courts
came to the conclusion that the authority
had failed to meet the requirements for a
fair, transparent and non-discriminatory
procedure. But the courts not only
criticised the execution of the licensing
procedure, but also the licensing regime
within the Interstate Treaty on Gambling
(Glückspielstaatsvertrag - GlüStV) itself. The
courts challenged the limitation to 20 sports
betting licences as well as the seven-year
experimental licence duration. Above
all, the courts stated that as a result of
the complete failure of the authorities to
grant the licenses, the old unlawful state
monopoly on sports betting declared void
by the ECJ in 2010 (cf. Joined Cases C
316/07, C 358/07 to C 360/07, C 409/07
and C 410/07 Stoß and Others) is still active
and preserved.
This general conclusion is also shared
by the highly regarded Ince-Case (ECJ, case
C-336/14, Judgment dated 04. February
2016). Article 56 of the EU Treaty (freedom
to provide services) precludes penalty, even
where a private operator may in theory
obtain an authorization to organize or
intermediate sporting bets, to the extent that
knowledge of the procedure for granting
such an authorization is not guaranteed and
the public monopoly regime with regard to
sporting bets, deemed by the national courts
to be contrary to EU law, has persisted
despite the adoption of such a procedure.
This is clearly the case in Germany, where
an unlawful state monopoly is preserved
because after more than four years there is
no true authorization procedure in place
as none have been granted. This leads to
the conclusion by the ECJ in the Ince-Case,
that any penalization of unauthorized
intermediation of sporting bets by a private
operator holding a licence in another
member state cannot be enforced.
This judgment eventually led to another
novelty in the German regulation: a formal
“suspension order” granted by the Federal
State of Hesse and valid only in the State
of Hesse. A hopeless attempt to formalize
and legalize a common practice, because
there has been a nationwide suspension of
almost any law enforcement against illegal
gambling operations and advertising in
Germany for several years already.
On top of this, Germany was formally
issued with a pilot letter by the EC
detailing its widespread objections to
the current gambling regime. This pilot
proceeding is basically finished, and the
EC is expected to launch infringement
proceedings against Germany by the
end of 2016 at the latest. That could
ultimately force Germany to abandon
its strict gambling regime as the EC’s
expressed concerns leave little doubt
that this has to be revised, and early
stage discussions on a new GlüStV have
already begun among the German states.
Unfortunately however, these discussions
will most likely only lead to a very limited
recast of the current GlüStV, allowing the
states to grant a total of 35 sports betting
licenses for all applicants under the stillpending procedure.
So, after after all, it is legal today to
provide online sports betting services in
Germany and advertise these, even on
television and the internet, despite the fact
that no licences – neither for the operation
or advertising – have yet been granted.
In addition, the competent authorities
have not only ceased to enforce current
laws against online sports betting operators
but also against the whole variety of online
gambling services in Germany. Thus
gambling operators can today provide their
services with almost no enforcement risk,
even though – apart from ambitious hopes
for the EC infringement proceedings ahead
– most of these services will likely not be
legalized in the years to come. This current
situation should encourage the gambling
industry to seize the momentum and Enjoy
The Silence for the next couple of years, as
we will see more enforcement action once
the Federal States finally agree their limited
recast of the GlüStV.
CHRISTIAN MAYER
is a lawyer, Noerr LLP.
He advises exclusively
on public law and all
regulatory issues, with his
work focusing on the areas
of media and gambling, energy and
environment.
NAME: CHRISTIAN MAYER
DATE: 21 OCTOBER
WHEN: 10:00
iGB Affiliate Issue 59 OCT/NOV 2016
55