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German sports betting monopoly is not EU compliant

21 July 2015

Germany, a country with a monopoly in sports betting, supports a general ban for online casinos and poker with the chagrin of the European Commission. However, a so-called “EU Pilot” approach could be the first step of the Commission to investigate the matter once and for all. Germany has to present a strategy to end the current sports betting monopoly under state supervision immediately. If this is not the case, the process could lead to litigation in the European Court of Justice for breach of EU regulations against Germany. The Federal Republic is ruled by gray and black market. Therefore the commission also proposes to end the ban for online casinos and poker because of the fast growing and uncontrollable black market in Germany as quickly as possible. In the country illegal online betting and casino games generate an estimated € 17 billion. Germany has a regulation, the international treaty, that regulates the approval, but the model has not yet been implemented by the courts on federal level in the country.

The concern of the EU is that the delay is unreasonable, neither “fair” nor “proportional”. It is advised how other countries in the EU effectively generate regulatory models as well as integrate the reduction of gambling problems, match-fixing and the laundering of money in their policies and actions. The author of the document concludes that due to the monopoly in Germany there are no preventive measures in place, while fraudulent activity and crime in the illegal online gambling industry is growing in Germany. The commission also calls that the restriction of the sports betting licenses issued in German language and that are restricted to 20 is repealed. The commission also points to the apparent injustices in the lottery system that limits private actors in the context of a monopoly, while the most addictive products, the slot machines, will continue to be run by private operators. If the federal government does not revise its treaty soon, Germany could become the first country in the EU to be disciplined because of an unsatisfactory form of iGaming regulation.

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