In an effort to protect their own gambling industries, Germany recently enacted a ban on online gambling, much like the United States did recently with their Unlawful Internet Gambling Enforcement Act. The new German ban is called the German Interstate Treaty and was enacted on January 1. The treaty was passed by a majority of the German states, and is considered law. The European Gaming and Betting Association (EGBA) is challenging the treaty, filing a formal complaint with the European Commission. In one of many statements, the EGBA said â€œThe European Gaming and Betting Association calls on the European Commission to take swift action against the German Interstate Treaty on gaming.â€
The EGBA says that the German Interstate Treaty is in direct contravention of European Union law and â€œThe provisions of the treat severely restrict the rights of EGBAâ€™s members to provide services under Article 49 of the Treaty of Rome.â€ The European Commission, following their notification procedures, designed to remove obstacles to international trade, formally objected to the ban before it was enacted, but the German government went ahead with the ban regardless of the Commissionâ€™s wishes.
In another statement, Norbert Teufelberger, chairman of the EGBA, said â€œProhibition is not and never has been a solution, be it in our sector or other sectors. It is not a responsible approach and cannot be a substitute to an efficient gaming policy.â€ Continuing with his statement, he said, â€œFocusing on online gaming does not make sense when most recent peer-reviewed studies show that although online and offline gaming have different target audiences, playersâ€™ behavior is similar whether online or offline.â€ Teufelberger also stated that online gaming allows for more transparency and traceability.
The European Commission itself has been seeking to reduce the international barriers to competition in the gambling sector, but has met heavy resistance. EU Internal Market Commissioner Charlie McCreevy began pursuing legal action against Germany last year before the treaty went into effect. The European Commission is expected to come to a decision in the next few days on whether to take legal action against Germany and several other EU states that stifle competition in the gambling sector.
If the EU government, centered in Brussels, decides to take legal action, the next step would be to issue a final warning to Germany. Then, if the warning is ignored, the matter would be taken to the European Court of Justice, which can impose fines and forcibly make a country change its laws.
It is unclear how fast the European Commission can move against Germany, as international legal incidents can take a long time; therefore, the most significant challenges in the near future will be expected to come from domestic groups looking to change the law.