German gambling treaty under the microscope

German gambling treaty under the microscope

In an opinion on two cases currently before the European Court of Justice, Advocate General Paulo Mengozzi has outlined some of the legal difficulties which Internet technology has introduced into the international debate in Europe and the question of harmonisation of regulations.

AG Mengozzi was commenting on the German cases involving Markus Stoss (C-316/07) and the Gibraltar-based Carmen Media Group (C-46/08).

In the absence of harmonised legislation, EU member states are developing very different legislation which makes it "hugely challenging" for the community judge to ensure the respect of the Freedoms provided by the Treaty, the AG observed.

He went on to opine in the Stoss case:

* Monopoly holders can only promote participation in games of chance in a moderate manner and the intention cannot be to increase the revenue of the public purse.

* It is for the German national court to examine in particular whether Oddset, the German sports betting monopoly, meets these criteria. The German Federal Constitutional Court concluded in March 2006 that the advertising displayed by Oddset "was not intended to limit opportunities for gaming and to prevent addiction to gaming, but was intended to obtain tax revenue for the public purse".

Turning to the Carmen Media case, AG Mengozzi noted: "Consistency must always be examined from a national view point, with the result that regional differences within a Member State might render the system inconsistent".

Sigrid Ligné, Secretary General of the online gambling trade association EGBA commented: "This is the second opinion in a short period involving a German gaming case. AG Bot in January confirmed the primacy of EU law over German law by clarifying that non EU compliant law has to be immediately dis-applied, without any transitional period.

"Beyond the legal considerations, you have to look at the reality of the market. There is a consumer demand for online gaming in Germany. The sports community is losing out as it is not allowed to cooperate with the European gaming industry. Other EU member states are embracing the reality that online gaming is a popular leisure activity and have started regulating the sector. EGBA urges the German authorities to do likewise."

A date for the ruling of the ECJ has not yet been set.