Is Gambling Online Illegal in Germany?

Background to Gambling in Germany

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Like most European countries, Germany has a long history of sanctioned state gambling. Depending on who you believe, Germany may in fact have created the game of poker itself. Certainly, there was a game played in Germany in the Middle Ages that involved a hierarchical structure of card hands coupled with the ability to blatantly lie about what you were holding; it was called pochenspiel - which the French claim they invented.

The first public German casino opened in 1764 – some believe it was the first in the world.

But despite a colourful past, gambling has actually not been very popular in Germany in the last 100 years or so. Power centralisation, two world wars and the partition of the country during the Cold War have all been contributing factors.

However, in the early 2000s gambling in Germany suddenly took off.

Gambling Legislation in Germany

Despite the fact that Germany is split into 16 states, gambling is legal in all of them, and is entirely state controlled. Under their monopoly, gambling culture has of late thrived.

The German government derives significant tax income from its citizens' insatiable desire to gamble, but of late has had to work increasingly hard to keep other industry players out of the country.

Online gambling is forbidden under a recent law designed to protect Germany's gambling interests; a law which is under constant challenge and is in fact proving detrimental to Germany's own gambling business.

Current Legislation for Online Gambling

Under a law that came into effect on January 1 2008, all forms of online gambling are illegal in Germany. The sweeping ban prohibits all traditional online casino games as well as sports betting, online bingo and online lotteries. Under this legislation the government may order German Internet service providers to block customers' access to gambling sites, and to prevent German banks from doing business with gambling companies.

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The laws are allegedly to protect German citizens from the perils of online gambling, but in effect they safeguard the state-controlled German gambling industry. Significantly, this law is in direct contravention of existing European Union legislation which specifically allows online gambling, and has formed the basis of several legal challenges.

The law has not been without impact on Germany's own operations, and this dichotomy seems to imply that change is imminent. In October a German court ruled that under the current legislation Totto-Lotto, the state-run lottery of Saxony, can no longer operate or advertise over the Internet – clearly an unforeseen consequence when Saxony voted in favour of the law in 2007.

The European Commission can force EU member states to comply with regulations on online gambling by suing them. Several private companies have already begun legal challenges to the law. Australian gambling giant B-win Interactive had lost two actions against the German state, but it continued to appeal, as it believed that Germany must respect the EU rules on online gambling. And finally, in Dec. 2010, after six years of severe legal battles, the German Supreme Court ruled in favor of Bwin, giving a reason for joy to all those who want to see the German online gambling market opened. Further positive developments in this direction are expected soon.

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