Schleswig Holstein Begins Process To Join German Treaty

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The Schleswig Holstein (SH) ruling coalition government took the first step in the legislative process of joining the Gambling Treaty proposed by the other German states and repealing the liberal online gambling licensing law passed by the previous government. Given that the coalition has only a slender majority and the legal issues involved the SH government has decided to proceed with extreme caution.

The bill was introduced by a carefully worded statement to parliamentarians by the Interior Minister Andreas Breitner. Breitner said that under EU Law SH will have to wait till the European Commission (EC) has been given the opportunity to consider and comment on the new draft legislation. The repealing of the liberal law and joining the other German states could only be implemented after EC comments are received. This period can be as long as three months and also could be extended to four months should another EU member state becomes involved with an objection or comment. During this standstill period no action can be taken.

Breitner also explained that the current law, which provides for the regulation and licensing of online gambling, will remain in force during the standstill period. Therefore SH can be required to consider the pending license applications and grant the licenses if the required criteria are met. There are about 30 such licenses in the pipeline. Two online gaming operators have already gone to court over delays in issuing their licenses. Breitner also pointed out that the seven licenses that have already been issued will remain valid for the specified period of six years. Given this situation, observers feel that it will be difficult, if not impossible for SH to join the German Treaty whilst the licenses remain in force.

The two online gambling operators that have filed law suits for unreasonable delay in issuing of online gambling licenses under the currently liberal law are MyBet and Bwin.Party. If these law suits succeed then other aggrieved companies are likely to follow this route. This would further slow down the SH coalition government’s retrogressive plans to rejoin the German Treaty. There are two other problems that are likely to arise at some point in time. The EC had expressed reservations about the restrictions imposed by the German Treaty, but had approved the current SH law as providing fair, equitable and non-discriminatory regulation and licensing of online gambling companies. Therefore it is unlikely to look favorably on this bill which has just been introduced in the SH parliament. Opposition politicians have also warned the SH government that they strongly oppose the move to repeal the present law and join the German Treaty.

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