German State In A Bind Over Online Gambling

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The German state Schleswig-Holstein (S-H) has been caught between a rock and a hard place. The new coalition government in power wants to turn away from the liberal online gambling laws passed by the previous government and join the more restrictive regime being set up by the remaining states. But it is unable to do so because of the legal backlash that will ensue and of which it will be on the receiving end. Hence utter confusion prevails as is evident from the statements made by the spokespersons of the government to the media.

The initial threats to repeal the liberal regulatory legislation signed into law by the previous government have been tempered and a more practical way out is being sought. Seven online sports betting companies have been issued licenses. They have made it clear that if their licenses or terms of operations are tampered with under any new dispensation then they will go to court. Further, under the existing law S-H is required to issue more licenses to applicants. If the government fails to do so the applicants could again take recourse to legal action. And since the issue would be decided on the basis of existing laws the government would face the embarrassment of losing the court cases. Therefore unofficial sources reveal that the issue of another seven licenses is imminent.

Another issue involved is the legalization of other online gambling verticals. A CDU party politician speaking to the local publication Games und Business stated, "Interior Minister Andreas Breitner now understands that he can no longer exclude the rightful licensing of online poker in addition to other types of gambling". As many as 14 companies whose license applications are in the pipeline are interested in online casino and poker activity. Therefore one cannot rule out that licenses will be issued for online gambling products other than sports betting, which has been the case thus far.

The problem is that if S-H goes ahead with the steps it is legally required to take, then joining the German Treaty would become more difficult, if not outright impossible. The German Treaty favors a monopolistic set up with limited issue of sports betting licenses and outright rejection of all other forms of online gambling. Right now it appears that S-H seems resigned to be moved around by the waves without setting any course of its own.

Portugal also is in a similar situation. The government wants to continue with the gambling monopoly operated by the Santa Casa de Misericordia de Lisboa. However, the thinking is being pushed towards liberalized online gambling. Here the driving force is not the legal consequences but the dire need to generate revenues. The government is contemplating how far towards liberalization it will have to go.

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