Update: Operators Support only Schleswig-Holstein

The state’s progressive approach attracts attention

In light of the recent news that the 16 German states are to break up their monopoly on gambling and occupy a more relaxed and EU-compliant position, some of the major operators in the market issued a statement regarding these movements.

Most of them praised the progressive approach of Schleswig-Holstein which unlike other states doesn’t intend to retain some monopolistic elements, and since the operators find it most attractive, the state could also see a major share of taxation revenues end up in its pockets.

"European gaming companies request regulations that are competitive and comply with EU law, and welcome the law drafted by Schleswig-Holstein’s government coalition," a spokesman for the operators said, adding: "The operators are awaiting only the implementation of the favoured state's new online gambling regulations.”

The bill proposed by the state, according to operators, is a practical model which complies with the European Court of Justice Guidelines, and gives reputable gaming companies the opportunity to offer German customers secure, attractive and market-driven products in line with the EU law conditions.

The state has opted for a regulatory approach that secures the state‘s lottery monopoly, but which would remain receptive to market realities in other gaming segments and simultaneously ensure a high level of consumer protection.

However, the Minister Presidents on Apr. 6 agreed on the key issues paper for the continuation of the Gaming Treaty, which the operators disapprove, and which is contrary to the European law.

According to the spokesman, "the model cannot be executed; it contains nothing except a de facto continuation of the sports betting monopoly. Massive advertising restrictions, a far-reaching ban on live betting, restrictive taxation, limits, as well as a ban on poker and casino games have little to do with societal reality and make it impossible for private companies to operate their businesses.”

"The experiences from other EU countries and the experience from the past four years in Germany clearly show that this type of regulatory approach is doomed to failure. The intended channelling and regulation of existing markets will not be attained, even with the proposed Internet blocks which have not been enforceable to date."

On the other side, Schleswig-Holstein’s bill will provide a favorable environment for a modern and appropriate regulation, he assessed, stating: The leading European gaming companies acknowledge their social responsibility. They will fulfill all the licensing requirements and legal obligations, especially their tax liability. Only this will create the foundation of effective consumer protection and the protection of minors, as well as the prevention of compulsive gambling and manipulation in sports."

As for the individual statements made by company reps regarding the support for the Schleswig-Holstein approach to regulation, they were the following:

Jörg Wacker, of bwin.party digital said: “Schleswig-Holstein has blazed a new trail with its bill. This bill complies with EU law, corresponds to market reality and the Internet age. The implementation of the key issues proposed by the Minister Presidents last week would be as doomed to failure as the expiring monopoly model in Germany. Over 16 percent turnover tax on sports betting would not enable a competitive product to be placed in the market. Excluding poker and casino offers would enable the black market, as well as unregulated sports betting continue to exist in this segment. Thus, the Federal State’s objective of channelling, ensuring player protection and fighting manipulation would miss the mark.”

From Betfair, Dr. Peter Reinhardt, said: “Sound regulation of the gaming market should not be blind to market realities, if it wants to succeed. A legal offer in Germany has to be geared toward the consumer and his needs. Otherwise, we run the risk that a Euro 5 to 8 billion market will continue to bypass the government. The Schleswig-Holstein bill gives us the historic opportunity of implementing a model in Germany that is equally in the best interests of the consumer, the state and sport, as well as the gaming companies.”

Sven Stiel, a representative of online poker's PokerStars commented: “Poker captivates people. Whether on ProSieben or SPORT1, in BILD or at DPA, poker has become a mass phenomenon and has arrived in German living rooms. However, not everyone is aware of this. Yet, numbers say more than a thousand words: 4,000,000 Germans play poker. The Minister Presidents want this market to remain unregulated, thus making every amateur player a criminal. Schleswig-Holstein has recognized German players’ needs and presented a realistic form of channelling. PokerStars will, as exemplified by Italy and France, be one of the first to apply for a license in Schleswig-Holstein and fully implement it. Player protection, jobs and channelling can be easily executed with the presented mode”

The representative for Jaxx-Mybet, Mathias Dahms, also stated: “Schleswig-Holstein has taken a leadership role in future regulation and we would be very pleased if the other Federal States would take a closer look at the proposal from the North. The provincial government in Kiel has shown us a new way forward and now other States must follow, otherwise we will again have a virtual state monopoly. The model proposed by the remaining 15 Federal States, with its tough restrictions that make entrepreneurial success impossible, virtually seals off the German market. This type of law can only be enforced with the use of Internet blocks, blocking financial flows and detailed surveillance of citizens. Whether this can be implemented politically is questionable, particularly after the public discussions of the past few days. In addition, the intended channelling effect of converting the existing grey and black market offers into the regulated market is ad absurdum and changes nothing in the current situation.”

On behalf of William Hill plc, Neale Deeley, opined: “Regulations must be judged on what is actually achieved, not what is hoped for. The main aim must be to ensure that those German citizens who choose to bet online do so with operators who are licensed by the state. Any impediment to this, whether through product restrictions or unworkable tax regimes, will merely perpetuate the existence of unlicensed operators, thereby undermining consumer protection, and industry transparency and accountability. The proposed Schleswig-Holstein bill fully facilitates and promotes those objectives, and in addition will generate tax revenues and create employment opportunities across a wide range of business sectors.”

Dr. Norman Albers from the German Bookmaker Association, observed: “There is no feasible alternative to the Schleswig-Holstein bill. It is balanced and pursues the same protection goals as the newly failed Gaming Treaty. The Federal States’ April 6 counter proposal subjects private bookmakers to antitrust laws without authorizing us to participate in sports betting. That would destroy traditional betting on horseracing in Germany.”

Norman Faber, President of the German Lottery Association commented: “Even the German Lottery Association, which represents the commercial lottery agencies, such as Faber and Tipp24, back the Schleswig-Holstein bill. The bill creates legal security for us, since the procurement of state-run lotteries are not subject to an unlawful EU, arbitrary "subject to permission“, without clear criteria, without legal claim. In addition, the Schleswig-Holstein bill does not plan an illegal cartel merger of state-run lottery companies, which would mean the end for private lottery agencies on the Internet.”

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