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25
May
2012

To gamble remotely or not to gamble remotely: that is the question

POSTED BY Global Administrator
Let me tell you, as best I am able, about the Schleswig-Holstein question. In the latter years of the nineteenth century, a young member of parliament asked Lord Salisbury what this question was all about. After some deliberation, Salisbury replied that only three men had ever truly understood the question. Prince Albert (by that time, long since dead); a German professor (by that time, mad); and Salisbury himself. Disappointingly, Salisbury does not expatiate further on what the question actually was, thereby going one better than those politicians who followed him who are, as a rule, simply reluctant to answer questions put to them rather than to avoid their formulation in the first place. Which brings us back to Schleswig-Holstein, which is again the subject of a question. But while this question is perhaps one which can be more easily framed and understood than its legendary predecessor, the answer is just as elusive. Let me elaborate further. As we observe in our recently published report on mobile gambling, Europe is currently in the process of liberalising its remote gambling legislation. Historically, sports betting across continental Europe was effectively the preserve of state-owned tote/pari mutuel operators. Accordingly, sports books which had extended their brand into the online space (such as William Hill and Ladbrokes) and sports books which were online only (bwin, Blue Square) found it difficult to establish user bases in many of these countries. However, would-be service providers had an ally in the form of the European Commission, and Article 49 of the Treaty of Rome. The latter  enshrines the guarantees the free movement of services across borders. One of the first companies to protest to the Commission in this regard was bwin, in March 2006. Subsequently, a number of other service providers made complaints against a total of 10 EU nations, primarily with regard to sports betting services. The net result was that the European Commission began to take action against a number of national governments on this issue, and that – albeit gradually – legislation which provides for the liberalisation of remote gambling services was enacted. Despite the publication of a Green Paper which rejected “any European legislative act uniformly regulating the entire gambling sector” in favour of subsidiarity, competitive frameworks permitting remote sports betting and poker have been put in place in countries such as France and Italy, with the result that – particularly in the latter market – uptake has been dramatic. In Germany, however, the situation is rather complex. Remote gambling has been prohibited since 2008, but just over twelve months ago, the German Lander (states) agreed the New State Treaty or GIGT (German Interstate Gambling Treaty, Glücksspielstaatsvertrag), under which they would award seven nationwide concessions for sports betting companies; remote casino-type gaming would be permitted, but only by companies which held an existing land-based licence. However, not only did the EC object that the treaty infringed European law on several points, but then one of the Lander – you’ve guessed it, Schleswig-Holstein – broke ranks and enacted its own legislation, which stipulated that licensees did not require a land-based licence, merely a branch office within the European Economic Area. Thus, the question posed becomes: is remote gambling legal within Schleswig-Holstein? The answer: well, there is no definitive answer; at least, not yet.