Hambach & Hambach obtain new Court Decision on the Sports Betting Issue

Rechtsanwalt Dr. Wulf Hambach

Hambach & Hambach Rechtsanwälte
Haimhauser Str. 1
D - 80802 München
Tel.: +49 89 389975-50
Fax: +49 89 389975-60
E-Mail: w.hambach@timelaw.de
Munich, 14.9.2005. Two and a half years ago, Advocate General of the ECJ Siegbert Alber delivered his Opinion in the now legendary “Gambelli” case. On the 15.10.2003 – shortly before the ECJ reached the Gambelli Decision – the Administrative Court of Stuttgart had already referred (case no.: 10 K 1472/05) to Alber. In this decision, which favoured a private sports betting provider, the Court referred to the fact that the Advocate General (in his Opinion of the 13.03.2003) argued that the limitation of the freedom of services guarantee could no longer be justified by overriding reasons of general interest. This is particularly the case against a background of increasingly aggressive advertising by licensed sports betting organisers and state financial interests.

In his Opinion EU Advocate General Alber made clear that no particular danger could be assumed to be posed by a bookmaker who had already been through a license procedure in an EU member state:
„The potential dangers which would be expected to be posed by the organiser can be counteracted by control of access and/or monitoring of the activity. If a sports betting organiser satisfies the requirements applicable in another member state, then this should be sufficient for the member state receiving the service (Note: e.g., Germany) and the member state should accept this as an adequate guarantee of the integrity of the organiser.“
In the decision of the 8th of September 2005 obtained by the Hambach & Hambach Law Firm, the 10th Chamber of the Administrative Court of Stuttgart emphasised the following: Where an administrative authority wishes to prohibit an EU-licensed sports betting firm with immediate effect, the authority must, in order to justify this prohibition, be able to prove that the firm poses concrete danger to the common good. The Administrative Court of Stuttgart stated the following:
„the Defendant (Note: Administrative Authority), in justifying the penalisation of the actions of the Applicant, continues to blankly state that danger is posed by the continued activity of the Applicant, in particular to the individual legal rights to life, health, property, ownership and assets of the affected player, including the young who require protection and who will be enabled to freely and actively take part in – illegal – gambling at any time.“
In relation to the danger posed by private – in comparison with state – sports betting providers, the Court stated the following:
„Furthermore, here (note: above mentioned danger to the individual objects of legal protection), it is merely the general dangers, which exist to the same degree in relation to bets organised by licensed firms. The potential danger does not depend on where the gaming revenue is going, rather on what measures are taken to prevent excessive loss. Concrete breaches such as of the youth protection provisions, irregularities in relation to the operation of the game or the payout of winnings have not been determined by the Defendant. Based on this legal situation, the balance of interests falls in favour of the Applicant. This is because the implementation of the order would constitute a considerable and irreparable breach of the Applicant’s constitutional rights, at least that contained in Art. 2 para. 1 of the German Constitution.“
Following this decision, the German authorities will have to be more careful in examining whether they proceed against an EU-licensed bookmaker in Germany. If the authorities cannot prove that the private sports betting firm – in comparison with the state provider ODDSET – is managed unreliably, the authorities may not – in the opinion of the Administrative Court of Stuttgart – undertake any repressive measures against such providers – at least until the decision of the Federal Constitutional Court, which is expected in the next year.

The expectation of the state sports betting provider ODDSET (as well as the providers with a „GDR-License“), to keep the potential business for themselves is rapidly disappearing. When the whistle is blown in the Allianz-Arena in Munich on the 09.06.2006 for the kick off of the FIFA World Cup, many private sports betting providers will, together with the state providers, battle for the business from the World Cup fans and encourage sports betting fever. The revolution of the German sports betting market has already begun.

Important Note (of warning): Before foreign sports betting providers enter the German market, they must observe a large number of German provisions and bring their firm into conformity with the law. If careful (legal) preparation is not carried out, the provider can be caught by a competition law attack from competitors or even criminal proceedings.