German Court Rules Some Online Lotteries Legal

In the latest challenge to the validity of the German State Treaty on Gaming by the country's own courts, the Regional Appeal Court of Koblenz has ordered state lottery company Lotto Rheinland-Pfalz to accept certain types of online lottery ticket sales.

The court justified the decision by stating its reservations as to the validity and compatibility with EU law of the online lottery ban which was introduced at the start of this year by the German State Treaty on Gaming.

In line with doubts expressed by the European Commission, the court questioned whether German restrictions on gaming are coherent and systematically contribute to limiting gaming and betting activities.

The court also highlighted the fact that some forms of online gambling are still permissible in Germany and that players can submit tickets directly to lottery companies via computers installed at shops and kiosks of authorised lottery agents.

The case was brought by a company which submitted lottery tickets on behalf of Tipp24 in Rhineland-Palatinate and other federal states, after Lotto Rheinland-Pfalz refused to accept online tickets from the beginning of this year in accordance with the prohibitions contained in the State Treaty on Gaming

The court said in its ruling that 'repeat' tickets which were legally brokered online in the period up to 2008 were exempt from the online ban, even if the German State Treaty on Gaming applied. As a result, the court ruled that Lotto Rheinland-Pfalz must open its systems to accept online lottery ticket sales for 'repeat' lottery tickets brokered before December 31st 2008.

"The State Treaty on Gaming is completely disproportionate with regard to online lotteries, as the alleged lottery addiction used as justification has still not been proved to be a real danger by any scientific study," said Dr. Hans Cornehl, Director of Tipp24 A.G.

"At the physical retail outlets of lottery agents, players can submit their Lotto tickets completely anonymously and with much higher stakes than previously allowed by private brokers formerly active in Germany. It seems the state was really only interested in getting rid of its troublesome private competitors."

According to Tipp24, the court's reservations regarding the compatibility of the State Treaty with European law go even further, extending to the online brokerage of lottery products from 2009 onwards.

The company said however that the court has not yet issued any further temporary injunctions which would also apply to new online lottery tickets, because there was no urgency for such a temporary injunction as there were currently no lottery tickets waiting to be submitted via computer. This following the withdrawal of online lottery ticket brokers from the German market due to the State Treaty on Gaming.

The court said however that the possibility of submitting new online lottery tickets could be legally settled in principal proceedings.

In a statement Monday, Lotto Rheinland-Pfalz said the court's decision was "of no fundamental significance", adding that it would not open its systems to online lottery brokers.

Hans-Peter Schössler, Managing Director of Lotto Rheinland-Pfalz, said the company rejects the view of the court, which he sees to be in contrast to prevailing German case law and the recent decision of the ECJ in the bwin/Santa Casa case.