The administrative court in Hanover, Lower Saxony's capital, threw out Bwin's action against the state government, although it can be appealed.
Bwin has instigated several lawsuits over online gambling in Germany, where analysts say the company has a third of its sales. The country's 16 states reinstated a collective ban on Internet betting January 1st 2008 despite European Union requirements for the free movement of goods and services between member states. European Union regulators have started proceedings against Germany over the ban.
We have no doubt that the German state monopoly on Internet betting is legal and have ruled so several times,'' presiding Judge Werner Reccius said at the hearing. "This ruling only applies in Lower Saxony but if it prompts Bwin to shut down its Web sites in all of Germany, this would only reflect what the law actually is.''
"This ruling does not correspond to European Union law,'' Bwin company spokesman Kevin O'Neal said. "We will appeal the ruling in Lower Saxony and are confident that European Union law will be adhered in the end.''
The Lower Saxony judges allowed the company to appeal, because German courts have issued disparate rulings on the issue. "Many courts hold a different view from ours so it's worth having this ruling reviewed by a higher court,'' Reccius said.
Courts in the German states of Hesse and Bavaria have held that Bwin can't be forced to stop offering bets in just one territory, as it is technically impossible for the company to locate its clients.
Reccius said that in combination with mobile phones it's possible to locate any user and thus block access to players from a particular territory.
This week's case is 10 A 4359/07 at the Hanover Administrative Court.
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