Germany’s Sports-Betting License Plans Pummeled Again in Tipico Case

Germany’s gambling regulators have suffered another legal setback in a case which may strike to the core of the country’s ongoing attempts to put a cap on the number of sports-betting service providers licnsed and authorized to do business in the country.  In the latest blow to the country’s 2012 State Treaty on Gambling, a Hessian state court ruled affirmatively in favor of Tipico, a German-owned sports-betting company that previously found itself on the outside looking in at Germany’s already invalidated three-stage licensing process.

As a result of the decision announced last week, Tipico was granted a seven-year concession, though German authorities are expected to appeal the ruling.  According to the court, “The federal states are commanded to grant [to Tipico Ltd.] a license for sports betting with seven years’ [concession] from [this ruling]”

The decision, announced in a Wiesbaden courtroom, is the third straight setback for Germany’s licensing plans.  The country had officially designed an application scheme through which only 20 Euro-licensed operators would be allowed to do business in the state.  However, that plan was soon besieged on several fronts, from the case of s sports-bar operator (also in the state of Hesse, in southern German), who took bets through a site unlicensed in Germany but fully licensed within the European Union.

The owner of the sorts bar, Sebat Ince, prevailed in her lawsuit but at significant financial cost, since her bar was shuttered following the initial case brought by German prosecutors.

Then, the European Union Court of Justice issued an edict that Germany’s 2012 Gambling Treaty violated EU free-trade agreements, in a argument that largely paralleled the Hessian court ruling.  Both bodies found that the German licensing plan was opaque and arbitrary, with the only reason for the 20-license limit appearing to be that Germany’s state-run lottery wanted to limit the competition in any way possible.

Except — and with more prodding from the lotto folks — German’s state-level ministers chose not to accept the message.  Instead they decided to leave the flawed 2012 system largely intact, but with a doubling of allowed licenses from 20 to 40.  However, the 40 potential licensees were still only abut half of those who had initially sought German licensing, meaning that the ministers’ band-aid wasn’t really solving anything.

With this latest Tipico ruling, the pressure only increases further on Germany’s legislators to scrap the 2012 Gambling Treaty, despite the pushback the country’s lottery officials will provide.

As for Tipico, the possibility of seven years of virtual guaranteed licensing is a decent legal win.  The billion-euro firm is well known as a sponsor of Bayern Munich and is one of the giants of the German gambling scene, though it’s been on the market since at least last September amid the gambling world’s ongoing wave of corporate reorganizations.

Tipico itself published this statement about the legal win:

Numeric limitation of sports betting licenses is against the law

A next stage win on the way to regulation: On Friday, April 15, 2016, the Administrative Court of Wiesbaden ruled that a numeric limitation of licenses for private sports betting providers to twenty, as set by German State Treaty on Gambling, is against European law. Furthermore, the law suit filed by Tipico confirms the legality of the activities of the leading German sports betting provider.

Back in September 2014, Tipico filed a suit against the awarding of 20 sports betting licenses by the responsible Hessian Ministry for the Interior. In the main proceedings the court ruled that Tipico must get a license since the company fulfilled all the qualitative requirements for such. The limitation of the quantity of licenses represents an unlawful interference with the EU fundamental freedoms, the judges said. Once again, the court sentence criticised the lack of transparency in the licensing process and the resulting arbitrariness.

“This sentence clearly states that Tipico meets all qualitative criteria to obtain a sports betting license in Germany and that there cannot be any doubt about the legality of our business activities. As the leading provider, we will do our part and continue to constructively help paving the way for legally compliant regulations in Germany”, Jan Bolz, CEO of Tipico Co. Ltd., comments on the decision from Wiesbaden.

DSWV expects impacts on political debate

The German Sports Betting Association (DSWV) expects the sentence to create impacts on the ongoing political debate. On their last conference in March, the State Premiers agreed to hold on to the numeric limitation and to raise the number of licenses to 40.

“A limitation to 40 licenses is just as arbitrary as a limitation to 20. We call on the Prime Ministers to reconsider their plans,” says DSWV president Mathias Dahms and adds “The State Treaty on Gambling needs a fundamental reform to finally establish legal certainty. The State of Hesse has already submitted a constructive proposal.”