RGA on German Online Gambling

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Last week the Minister Presidents of the German Lander urged the adoption of the draft State Treaty on online gambling. This proposal has been rejected by the European Commission (EC) and has been criticized by the online gambling industry. Therefore the repeat call to enact this proposal drew a sharp response from the Remote Gambling Association (RGA).

RGA is the largest trade association for online gambling operators in the world. Its Chief Executive Clive Hawkswood expressed deep disappointment at the continuing ostrich like attitude of the German states. The proposal that the German states want to implement by July 2012 limits the number of licenses issued to operators to 20, imposes an uncompetitive and unviable 5% turnover tax regime, severely limits betting amounts and prohibits online casinos and poker rooms and live betting. Hawkswood pointed out that this is completely out of line with the more rational approach taken by European Union Member States such as Denmark and Spain. These countries will shortly introduce regulated regimes that will allow nearly all forms of online gambling and which are based on the much more viable gross profits taxation model.

Hawkswood said, "There appears to be no connection between the desire to provide German citizens with a regulated market and the actual text of the State Treaty." He added that the Minister Presidents say on one hand that they want to encourage sports betting with regulated German operators, but at the same time deny this to citizens who wish to participate in online casinos and poker games. Hawkswood made it clear that the proposed online gambling model in Germany will have no effect in curbing the large number of German citizens gambling at online casinos licensed in other jurisdictions. Policies to restrict players from accessing such online casinos have proven ineffective in the past.

Hawkswood emphasized that the EC has made it clear that the draft State Treaty violates EU law and the statement from the Minister Presidents will do little to allay the EC concerns. "In fact, such an approach simply makes the Schleswig-Holstein proposal more attractive and creates a fragmented, confusing and undesirable situation for German consumers," stated Mr. Hawkswood. The German state of Schleswig-Holstein was the only state that passed its own online gambling law earlier this year after it could not reach an agreement on several issues with the other German states. Its proposal regulates all gambling products on a gross profits basis and has already been approved by the EU through the normal notification process.

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