European Commission faults Germany’s new gambling Treaty

Germany’s plans to scrap the number of betting licenses has been slammed by the European Commission.

Süddeutsche Zeitung online news site has revealed the Brussel-based Commission has found the new State Treaty on Gambling, which was approved by all 16 states of Germany last year, inadequate.

The predominant concern – the treaty removes the cap on the number of sports betting licenses in an attempt to end the chaos surrounding the previous treaty.

That treaty was approved in 2012 and a maximum of 20 licenses were available. But court challenges by betting operators who weren’t successful in obtaining one of the 20 licenses put a hold on any being distributed. As a result, the controversial cap has been blamed for paralysing Germany’s gambling industry.

There were also 85 original license applicants, but only 35 made it to the second stage and 15 of these betting operators missed out, resulting in successful legal challenges.

The new treaty will now award the 35 applicants with a temporary betting license while other applicants will have to apply for full licenses that won’t be activated until 2018.

But the letter from the Commission to the Minister Presidents of Germany’s 16 federal states has said the new rules are unfair and there’s room for possible contradictions.

The Commission also criticised how the new treaty requires German gaming regulators to look to other European regulated markets to determine how to deal with foreign online casinos.

The letter suggests it is not “a viable solution” for the industry to just look to regulated industries, such as Malta or the Isle of Man, to fix the country’s “insufficient” consumer protection tools.

The Minister Presidents of Germany are due to sign the new treaty this week and while the Commission’s opinion will be discussed at length, the concerns may also be ignored.

Since the Commission has been criticising the State Treaty for years, the Ministers have their work cut out for them. But if the treaty goes ahead without recognising the Commission’s concerns, Germany may undergo an infringement procedure which has been considered since the country began to breach European law.