No changes to German State Treaty following EC criticism

29 August 2019

The state of Nordrhein-Westfalen claims criticism of the third amended State Treaty on Gambling by the European Commission will not lead to any major changes to the wording of the legislation.

Earlier this week it emerged that EC general director Lowri Evans had cast doubt as to how effective the Treaty would be in channeling operators and players into the legal market.

Evans in particular took issue with the short duration of licences, which are due to be awarded early in 2020 and in effect until 30 June 2021, after which a new regulatory framework is expected to be implemented.

This was written in a so-called ‘blue letter’, a formal notice that acts as a precursor to the launch of infringement proceedings against a European Union member state.

However a spokesperson for the State Chancellery of Nordrhein-Westphalen said Evans’ letter “contains nothing that might lead to any changes being made to the wording of the 3rd State Treaty on Gambling".

“On the contrary, the EU Commission expressly welcomes the ruling’s core aim to rescind the limitation on numbers of concessions that can granted for sports betting,” they added. “The Länder [German federal states] are currently consulting on how to react to the comments made by the European Commission.”

However leading German gambling lawyer Dr Wulf Hambach warned that the blue letter put further pressure on the states to develop a satisfactory framework from 30 June, 2021.

Writing for the trade publication Legal Tribune Online, Hambach said German risked having infringement proceedings launched, as the states had failed to perform a number of standard tasks in relation to gambling regulations.

In particular, they are yet to provide the European Commission with any data to prove the dangers of online casino games, which are prohibited under the State Treaty, he said.

Hambach previously told that support for a liberalised regulatory model, in line with Schleswig-Holstein’s breakaway model in which all products are permitted and a 20% gross revenue tax is levied on operators, was gaining support.

The likes of Hesse, Nordrhein-Westfalen, Rheinland-Pfalz and Baden-Wuerttemberg were all in favour of such an approach, he explained, with the likes of Sachsen, Bayern and Sachsen-Anhalt also potentially in favour.

In the wake of the EC criticism and against this backdrop of growing support for liberal legislation, the Minister-President conference, scheduled for October, could be “groundbreaking”, he said. This could see lawmakers set out a roadmap to a new, satisfactory, regulatory model.