The current ITG expires at the end of this year, on 31 December at midnight, and in recent weeks it has become evident that German politicians will most likely not be able to have a new Treaty approved and implemented before New Year’s Day. Theoretically, this means the market would be fully open on 1 January.
Many gambling experts wonder how German lawmakers managed to get themselves in such an incredible position. Only last April, the Heads of the German Federal States - except for Schleswig-Holstein - agreed on a new Interstate Treaty (NIT), which was subsequently sent to the European Commission (EC) for approval. The EC has three months to raise any concerns (the so-called standstill period), which means that, by 10 July latest, the EC has to make public whether it has any objections to the draft NIT and whether it is convinced the text complies with EU legislation. So far, the timing was right and the German gambling monopolies seemed to be safeguarded after 31 December.
Secondly, it is a safe bet to say the EC will reject the NIT in its current form. The NIT would allow online lotteries but solely those that are organised by the state lottery providers, and online sports bets for which a maximum of seven concessions shall be issued. In the past, the EC has made it clear it does not tolerate such monopolies and the Court of Justice of the European Union (CJEU) basically crushed the German framework in September 2010 when it said that ‘Germany’s state monopolies could not be justified under European law’. The NIT has failed to address these issues.
Pushing for a NIT that does not respect EU principles seems to be a refusal to acknowledge reality. It is becoming more and more likely the current ITG will expire without a new one replacing it in time, which means the market will be fully open, at least for some time. Conservative lawmakers being unable to regulate - for operators it must be a dream come true.
Michiel Willems, 2011. Published previously in a London based publication. Copyrights apply. Pictures: US State Department, state.gov.