Germany's State Treaty on Gambling Under Fire by European Commission

The European Commission has been very vocal in their criticism of Germany's State Treaty on Gambling once again, stating that its short-term nature will not motivate operators to apply for licenses.

General director, Lowri Evans, submitted a response after the legislation was submitted to the Commission in May, in which he says that effectiveness of the planned roll-out is very much cast in doubt.

Blue Letter Sent

He has submitted the so called “blue letter”...

...which really is a formal way of notifying a member state before launching infringement proceedings in which Commission can request clarification on elements of proposed legislation.

Evans openly criticized the short-term nature of the State Treaty of Gambling and even went on to demand answers regarding the logic of implementing The Treaty for a period of January 1st next year to June 30th 2021. And this is only in case that all 16 German federal states ratify the legislation by December 31st 2019.

The legislation itself was imagined as a placeholder to be enforced while lawmakers work on the new piece that will replace the Treaty as well as liberal regulations in place in Schleswig-Holstein. Some operators have already expressed concern that such legislation may not be properly enforced.

Not Enough Time For Measures to Become Effective

The bottom line of Evans' concern is that such short-lived controls may make the market unattractive for operators to join it. License application processing should begin on January 2nd, and these licenses would only be valid for 18 months.

He went on to note that the Treaty's provision of extending licenses by three years to June 2024 may not be enough to make securing a license any more attractive. Its very goals are under scrutiny as well...

...as he questions the idea that increasing player protection and driving unlicensed operators from the market could be achieved in an 18-month period. When the Treaty was first introduced in 2012, it was pledged that its effectiveness would be assessed – Evans is now asking when that will be.

No Evaluation So Far

Comments Evans:

“The Commission emphasises the need for a continuous evaluation of the implementation and application of the State Treaty, in particular (but not limited to) sports betting. The German authorities have already committed in 2012 […] to an evaluation of the appropriateness and effectiveness of the provisions relating to sports betting.

Unfortunately, in view of the previous non-award of sports betting licenses, no such evaluation has yet been carried out. Therefore, the German authorities are invited to [explain] how and when an evaluation of the appropriateness and effectiveness of the sports betting provisions will take place.”

EC's Grip Doesn't Loosen

Germany's gambling legislation was already criticized by the EC on previous instances. The original draft was deemed too harsh with its unjustifiable restrictions on companies' freedom to provide services in the EU as a result of a 20-license limit.

The second amendment was also under fire, this time allegedly restricting online casino and poker. The third amendment contains the prohibitions from the previous two, but it works in synergy with Schlewsig-Holstein's regulatory model which enforces no restrictions on products.

Source:

“European Commission criticises German State Treaty”, igamingbusiness.com, August 27, 2019.