Challenge to Baden-Württemberg Betting Monopoly Rejected

15th December 2009 9:15 am GMT

The Chief Executive of Germany's Baden-Württemberg Lotto company, Dr. Friedhelm Repnik, has called on the government to close illegal betting shops and step up the fight against European online betting providers, suggesting that the recent match-fixing scandal in German football is the result of such 'uncontrolled' betting.

Repnik's comments followed a ruling last week by the Administrative Court of Baden-Württemberg, in an appeal against a cease and desist order issued against private betting shops which allegedly brokered sports bets for betting companies licensed in Gibraltar and Malta.

Under the German State Treaty on Gaming, the brokerage of sports betting products without a license is prohibited and private operators are barred from applying for a licence, however a number of cases before the European Court of Justice challenge the compatibility of the restriction with EC law.

However, the administrative court said in its ruling Thursday that the sports betting monopoly is legal and consistent in view of its objective to fight gaming addiction and problem gambling. "The resulting restriction of professional freedom is subsequently also legal," said the court.

The court stated that the monopoly was compliant with EU law which permits a Member State to establish a monopoly "for the purpose of user protection, prevention of fraud and protection of social order".

"The related restriction of professional freedom and freedom of establishment are legal as they serve the purpose of reducing the possibility to participate in gaming," it said.

Commenting on the ruling, the Baden-Württemberg Lotto CEO said:"The State Treaty on Gaming has now been confirmed in main proceedings. The series of legal decisions against commercial betting providers has thus been continued. It is now recommendable to close illegal betting shops and the foreign internet betting offering must also be consistently fought."

Perpetuating the myth that the state monopoly is by default better placed to ensure the integrity of sports than private operators, Repnik said that the recent match-fixing scandal in Germany "clearly demonstrates what uncontrolled sports betting may lead to".

"The banking and financial services sector should, like in the US, be prohibited from working together with illegal betting providers," he said. "This is the only way to effectively stop the payment flows and drain the illegal gaming swamp."

Baden-Württemberg is the third largest German state with more than 11 million inhabitants and one of the most prosperous, being the headquarters of numerous corporations including the likes of Daimler Benz, Porsche and software giant SAP.

Last week the European Court of Justice heard two challenges to Germany's State Treaty on Gaming and the restrictions it imposes on sports betting (more). A verdict in the cases is expected early next year.

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