The European Union has taken the first step in the long process of taking legal action against Germany and Sweden, two countries that have come under fire recently for their legislative efforts to ban foreign-based online gaming companies in efforts to assist their state-run monopolies by preventing competing companies from taking a part of their domestic markets. By attempting to prevent foreign-based online gaming companies from bringing their services to the country’s people, both Germany and Sweden have violated the EU Treaty, which calls for open international trade in the market sector.
The EU has announced that they have given both Germany and Sweden formal notices, and the two countries now have two months to respond to the formal notices. If they cannot prove that their laws are in compliance with the EU Treaty and do not amend their laws so that they are in compliance, then Germany and Sweden will be brought before the European Court of Justice.
On January 1, Germany‘s Interstate Treaty went into affect, banning most forms of online gambling and prohibiting the processing of online payments. The Interstate Treaty is not a federal law, but an agreement between the sixteen German states, all of whom ratified the Interstate Treaty. Protests from the online gaming companies began almost immediately after the German Interstate Treaty was announced, and earlier this month the European Gambling and Betting Association, which is a group of eight different online gaming firms, urged the EU to take action. The EGBA was quick to announce their approval of the EU’s actions and their quick response to violations of the EU Treaty.
Sweden violated the EU Treaty by placing heavy restrictions on foreign-based gaming companies, and by having all of the poker games in Sweden, both online and offline, run by the national government. Online poker is only offered by Svenska Spel, which is the state-run online poker room. The EU formal notice states that Sweden cannot ban foreign-based gaming companies from offering poker to Swedish citizens while the Swedish government is actively promoting online poker through its state-run poker room.
The EGBA was joined by several more online gaming companies in voicing their approval of the European Union’s decisive actions against Germany and Sweden. It will be interesting to see how the legal drama within the European Union unfolds, and whether Germany and Sweden will be brought to task for their blatant violation of the EU Treaty in their efforts to protect the profits of their state-run monopolies.