Germany to Ban Online Gambling Jan. 1 Under Accord by States
By Karin Matussek
Dec. 27 (Bloomberg) -- Online gambling will be banned in Germany as of Jan. 1 after German states ratified an accord that preserves the country's state monopoly for lotteries and most forms of betting.
At least 13 of Germany's 16 states have submitted the ratification documents, Eric Braum, a spokesman for the Hesse government, which monitors the process, said in an interview today. ``That's the required majority and we expect to have all the rest coming in by New Year's Eve.''
All 16 state legislatures voted by mid-December to approve the new online-betting laws, which the states negotiated after the Federal Constitutional Court ruled in 2006 that the former model was unconstitutional. The new rules, which expire at the end of 2011, have drawn criticism from Internet betting companies and lottery brokers like Bwin Interactive Entertainment AG, Fluxx AG and Tipp24 AG.
The new rules ban any form of Web-based gambling or brokering of games over the Internet. The states may order Internet service providers to block Web sites of illegal betting operations and banks to stop money transfers to them. The rules' definition of illegal gaming includes placing a bet from German territory over the Web with a company based outside Germany.
The regulations also will outlaw advertising of gaming over the Internet and on television. Advertising in print and other media may no longer ``directly invite, incite or prompt'' customers to play; it may only ``inform'' about the possibility to do so.
`Contrary to Law'
Tipp24 said last week that the company ``doesn't see its business model jeopardized'' because it expects the new rules to be overturned in court. The company regards the regulations ``as clearly contrary to law and will sue for its rights if necessary,'' Tipp24 said in a statement Dec. 19.
Bwin sued four German states on Oct. 30 seeking to continue offering online bets after the rules come into effect. The cases are pending.
Bwin operates a site under a license originally issued by the communist East German government before unification and another portal under a Gibraltar license. The company claims that both permits prevail over the new online-betting ban and will continue to operate its sites.
``We think that in the second half of 2008 the European Court of Justice will have stopped this futile effort to keep us out of Germany,'' Hartmut Schultz, a spokesman for Bwin, said in an interview Dec. 18.
The European Commission, the European Union's Brussels- based regulator, called on Germany to reconsider the total ban on online betting, saying the step was disproportional. In April, Germany rejected that demand, arguing the rules are needed to protect citizens from the dangers of gambling.
``I am pretty sure the commission will escalate the process and send a formal warning the day after'' the new law takes effect, Wolfgang Kubicki, leader of the FDP opposition party in Schleswig-Holstein's Parliament, said in an interview on Dec. 20. ``Berlin will have something in the mail on Jan. 3.''
The commission can sue EU member states to force them to comply with EU law.
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