Brussels Questions German E-Gaming Ban

Ulrika Lomas, for LawAndTax-News.com, Brussels

04 February 2008

The European Commission has launched an investigation into new German legislation restricting the supply of gambling services.

In an announcement last week, the EC explained that it has sent a an official request for information to Germany in an attempt to verify whether the measures in question are compatible with Articles 43, 49 and 56 of the EC Treaty.

However, the Commission stated that its decision to investigate German legislation relates only to the compatibility of the national measures in question with existing EU law, and does not have any implications for the liberalisation of the market for gambling services generally, or for the entitlement of member states to seek to protect the general interest, as long as any measures are "necessary, proportionate and non-discriminatory".

The new inquiry focuses on a number of provisions of the new legislation which entered into force on 1st January, 2008.

Some of the key restrictions that are being questioned in terms of their compatibility with the EC Treaty's Internal Market provisions are as follows: the total prohibition of games of chance on the internet, notably sports betting, on which the Commission sent a detailed opinion to Germany in March 2007; advertising restrictions on TV, on the internet or on clothing or billboards; and the prohibition imposed on financial institutions with regard to the processing and execution of payments relating to unauthorised games of chance.

Horse race betting on the internet has not been prohibited under the legislation, while slot machines are widely used, and the advertising of games of chance by mail, in the press and on the radio is still permitted.

The Commission's decision to inquire into the compatibility of the measures in question is based on complaints made by a number of service providers, and on information gathered by Commission staff.

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