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German states working on new cohesive online gambling framework

By Caroline Watson
After two years of legal setbacks, the heads of Germany’s 16 states have finally agreed to modernise the country’s online gambling regulatory system, into an effective one that abides by European law.

After the annual conference in Warnemünde, the newly established framework will allow for open licensing and qualified online operators.

A press release was published explaining how the German states will now work towards repealing the country’s 2012 gambling act, which has proved ineffective at creating appropriate business conditions for the gambling sector and its stakeholders.

The 2012 State Treaty allowed for the provision of online sports betting options, however, it put a cap on the number of gambling companies that could operate in the local market to just 20.

The decision was highly disapproved and reproached by European authorities, operators, and other involved parties.

According to a ruling by the Fifth Chamber of the Administrative Court of Wiesbaden, the 20 licences cap violated European Union-wide standards for the “freedom to provide services”.

As one of Europe’s most lucrative and prominent gambling markets, it is unsurprising that dozens more firms than the allocated 20 sought to be approved for a German licence.

In an attempt to keep the original plan largely intact, the government doubled the number of available licenses from 20 to 40. However, following an unbroken streak of legal setbacks, Germany’s state-level prime ministers have given upon the country’s original licensing concept.

In the future, the licenses will be made on the basis of qualitative minimum standards without any capping.

The limited-licensing plan was heavily lobbied for by Germany’s state-run lottery group, LOTTO Hamburg, which stood to achieve significant financial gains had Germany succeeded in artificial limiting its own online gambling. However, it now appears that most or all of the 73 initial operator applicants for German licensing will now stand a reasonable chance of approval.

Following the publication of last week’s press release, The German Betting Association DSWV, stated that the agreement makes it “hopeful”.

It welcomes the progressive interstate initiative towards a coherent gambling framework, further adding that “the letters of intent must be consistently implanted now”.

DSWV president, Mathias Dahms says: “This requires a new State Treaty on gaming with new systematic: The European law monopoly on sports betting should not be only temporarily suspended, but must be completely abolished.”
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