Transparency issues halt German sportsbook licensing

6 April 2020

The ruling of the Darmstadt Administrative Court that derailed Germany’s sports betting licensing process has been published, revealing that issues relating to transparency were key to the judge’s decision, which the body responsible for the procedure is preparing to appeal.

The case, brought by Austrian bookmaker Vierklee, ultimately saw the court halt the award of sports betting licences, prompting dismay from many industry stakeholders.

In its challenge, Vierklee argued that while it had been interested in applying for a licence, it had faced an opaque process that appeared to benefit those that had been active in the market for some time.

It noted that last year the Regional Council of Darmstadt had informed these operators of the launch of the new process, and invited them to a special information event in August 2019. This effectively meant that some had more information on the procedure than others, which could only work on what was published on the Regional Council’s website.

This information, in turn, was seen as insufficient, meaning these companies were at a disadvantage compared to those already active in the market, and ultimately amounted to a violation of the European Union’s transparency requirements.

They also agreed that there was a lack of transparency regarding the criteria that operators had to meet to secure a licence, and that changes could be made without due notice or a full explanation.

The lack of a uniform date from which all licensees could launch, meanwhile, was seen as discriminatory, as it gave incumbents an advantage.

Finally, the involvement of the Glücksspielkollegium, the regulatory authority made up of representatives from Germany’s 16 states, also influenced the ruling. The powers and duties of the body have long been seen as unconstitutional and opaque, and there is little indication as to whether it can be trusted to make arbitrary decisions.

However, the judge left open the question as to whether the successful challenge effectively killed the third amended State Treaty on Gambling. It is due to expire on 30 June 2021, after which a new, expanded regulatory framework, the Glücksspielneuregulierungstaatsvertrag, will come into force.

The Regional Council, however, has the option to appeal the ruling. It has been given a two week window to file its challenge with the Hessian Administrative Court. The Council confirmed to iGB that it will indeed appeal the decision.

Before the process was halted, the Regional Council claimed as many at 50 operators had either applied or were preparing applications, adding it was close to issuing the first licences.