Court Rules No German I-gaming Inconsistencies
There is a different rate of change in different German states with regard to gambling regulation, so a transition period is acceptable and there are no inconsistent restrictions.
Such was the conclusion of the German Federal court in trying to sort out the confusion created by Schleswig-Holstein issuing e-gaming licences, whilst restrictions on the same e-gaming services exist in neighbouring German states.
The court drew upon the case of Markus Stoss in the EU that ruled difficulties in applying a monopoly to foreign-based operators did not prejudice the compatibility of that monopoly with European Union law.
Four questions were posed:
1. Is there an inconsistent restriction of the gaming sector if:
– one state in a federal system allows gaming practices that are illegal under a Federal statute that is law in the other Federal States and as a consequence the legitimate aims of the restriction on gaming for the common good in these states could be adversely affected?;
2. Does the answer to the first question depend on the extent to which the actions of the deviant legal position in the one State nullifies or adversely affects the aims of the other states in restricting gaming for the common good?
If the answer to the first question is yes:
3. Is the inconsistency set aside, if the deviant State accepts the same restrictions that apply to the other Federal States, even if the more lenient controls on gaming mean the concessions already awarded will continue in force for a transition period of several years because cancelling these concessions could involve the State in financial penalties that would be hard to bear?
4. Does the answer to the third question depend on whether, during the transition period, the aims of the other Federal States in restricting gaming are nullified or significantly prejudiced?
The Federal Court has decided that the principle in the Markus Stoss case applies to the relationship between Schleswig-Holstein and e-gaming customers in the rest of the German Federal States. Therefore, the answer to the first question is no, there is no inconsistency in the application of the restrictions.
In reply to the second question, there is no inconsistency over the application of restrictions in other Federal States if the nature of these restrictions is not significantly affected by the more liberal control in a single, smaller State. The threshold for the level of impact seems to depend on the extent to which the divergent regulation creates uneven trading conditions according to European Union law.
The rate of change may differ from State to State in order to take into account regional differences and in order to allow the local administration to make the required changes. So in reply to the third question, a transition period does not create inconsistency and is especially necessary because of the financial penalties that would be incurred by Schleswig-Holstein if licences were cancelled.
The answer to the fourth question is also that there would be no inconsistency.