Germany Bans Online Gambling, EU Expected to Take Action

The 16 German states have all voted to approve a gambling treaty which has effectively prohibited all forms of online gambling in Germany.

The new law went into effect on January 1 and is expected to be heavily challenged by the online gaming operators and possibly by the European Commission as the new legislation clearly is at odds with European Union laws.

The law prohibits foreign online gambling operators from accepting wagers from German residents. Internet service providers and banks may also be required to block payments to and from online gambling providers. All online gambling advertising is now also prohibited in Germany.

Online casinos and gaming operators have been fighting a long-running battle with the various German states in regards to online gambling within the country, with some operators declaring the new law to be illegal and considering launching legal challenges in the hope they can target the valuable German online gambling market.

According to an article on the Gaming Intelligence Group news website, notable constitutional lawyers have confirmed the State Treaty on Gambling contravenes both the German constitution and European Union laws.

The European Commission is almost certainly going to wade into the action, having previously shown little regard for member states who seek to restrict the free flow of goods and services within the European Union. If the case is referred to the European Court of Justice, it will almost certainly rule against the Treaty, unless the German states can prove the new legislation is not protectionist in any way.

Jens Schumann, Tipp24 AG chairman, believes the new legislation is illegal and may not withstand a legal challenge:
"The action taken by the states in this case is another example of how politics interferes in the market economy in a biased manner under the guise of maintaining order. Successful companies in the sphere of state lotteries are to be eliminated through the argument that this will protect the population from gambling addiction. Everyday you can see how seriously the state is really taking the issue by looking at betting outlets, casinos and amusement arcades, which continue to face no advertising restrictions."

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