European Commission Favors iGaming Regulation for All Members, Including Germany

The rift between Germany and the EU in online sports betting continues to widen.

Monopoly Frowned Upon

Germany, a country with a sports betting monopoly, maintains a blanket ban on online casino and poker, to the dismay of the European Commission. However, a so-called “EU pilot” approach is the commission's first step towards resolving the matter once and for all.

Unless Germany cannot immediately indicate an intentional strategy to end the current sports-betting monopoly under the state-owned Oddset, the process could lead to litigation against Germany in the European Court of Justice for infringement.

Black Market Proliferates

The commission also suggests German reconsiders the ban on online casino and poker due to what the commission calls the “rapidly growing” and at this point uncontrollable black market in Germany, with illegal online gambling figures reaching an estimated €17bn (£12.1bn) in wagering stakes.

Germany has devised a regulation model of state treaty and licensure, but the model has yet to be implemented due to court challenges at the federal level in the country.

The concern of the EU is that the delay is unreasonable, with neither “appropriateness” nor “proportionality” visible in the iGaming ban, as other countries in the EU are generating effective regulation models which incorporate reduction in gambling addiction, match-fixing and money laundering into their strategies and policies.

Pilot Disagreement

The pilot document concludes that in Germany, the blanket monopoly cannot be considered a preventative measure when fraudulent activity and crime is growing in the illegal online gambling sector in Germany.

The commission also calls for removal of the cap on sports-betting licenses issued in German that now limits the number of operators in the market to 20.

The commission also points out seeming inequities in the lottery system which restrict private players under a monopoly even while the most addicting product, gaming machines, continue to be run by private commercial operators.

Unless the German government revises its State Treaty soon, Germany could become the EU first country disciplined for an unsatisfactory form of iGaming regulation.