Germans Postpone Decision re Online Gambling Ban

In a heated debate yesterday, the premiers of the 16 German states failed to reach agreement on proposed laws to protect state gambling monopolies by banning online gambling.

Germany could find itself at odds with the European Commission if it were to deny access to gamblers on protectionism grounds. The EC is fighting to liberalize the European gambling market, but faces opposition from local and national governments who want to preserve state lottery and gambling monopolies.

The three south German states that have outlawed online gambling were doing so because they decided that an Austrian public company, Bwin Interactive, infringed their monopolistic law by not acting with their authority.

Bwin welcomed the postponement. “The states now have sufficient time to develop a legal framework for the German betting market in accordance with European law and the constitution."

The German press reports indicate that the state of Schleswig-Holstein was chiefly responsible for the defeat of the banning move at yesterday's meeting. To carry the motion, a unanimous vote was needed to ratify the proposed legislation, but it fell short when the leader of the state of Schleswig-Holstein declined to sign-off on the law. The other 15 German states were apparently agreeable to the proposal.

Media reports suggest that the 15 states that agree on the proposed law could attempt to go ahead with it anyway. If this happens there could be further ructions, as politicians from Schleswig-Holstein have reportedly said that they would take the matter to the German Federal Court.

But it seems that the German states will be cautious about the reaction of the European Commission to such a protectionist initiative. The leader of the state of Lower Saxony has been quoted as saying that any state treaty would be presented to the European Commission to examine its compliance with EU obligations.

To summarize, it is clear that the attempt at a unanimous agreement on banning legislation, which would have placed the issue before the federal parliament some time next year, has failed and the status of online gambling remains unchanged.

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