Online Gambling Scenario in Germany and France

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By all intents Germany is pursuing a policy of protecting its state owned gambling monopolies by trying to ban online gambling. However, this has only marginally reduced the incidence of online gambling in Germany.

The above conclusion was reached in a survey conducted by Bitkom the results of which were released this week. The survey was based on a sample size of 1000. The number of German online gamblers has reduced from 2.2 million last year to 2 million this year. Of these more than 1.7 million are males. Lottery is the most popular form of online gambling with 59% of the market share. This is followed by online poker at 22% and sports betting at 18%.

Bitkom executive Achim Berg called upon the German states to consider a modernization of the country's gambling laws at their next meeting in March 2010. The German state of Schleswig-Holstein has already indicated that it favors a licensing system rather than the ban that is currently in force through the German Interstate Treaty on Gambling. This treaty was signed last year and is effective till 2012. However, given the attitude of Schleswig-Holstein the treaty may not last the full term and even if it does the renewal is unlikely.

Meanwhile France is committed to liberalizing online gambling laws by allowing non-state operators to vie for a share of the market. Many leading European online gambling operators have already made preparations to enter this market announcing partnerships with French groups. Among them is Paddy Power, which is collaborating with PMU. The football World Cup is scheduled to be held next year in South Africa and this is a major event for online gambling. The online gambling industry was hoping that the new French laws would be in place before then so that they could access the French market. However it appears unlikely that the liberalized regime will be in place by the time of the World Cup. The new laws were originally scheduled to be in place by January 2010.

The proposal to offer licenses to operators for providing services in online gambling has been approved by the Members of Parliament in the National Assembly. It is expected that the Senate will pass the laws only by the end of March 2010. The legislation will then have to be approved by the National Assembly again. Finally the European Commission will take about three months to grant its acceptance. Licenses can only be issued after that, which means that it would have to be after the World Cup.

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