Sports-Betting and Gambling 2006 – a provisional Appraisal

Rechtsanwalt Martin Arendts, M.B.L.-HSG

Arendts Rechtsanwälte
Perlacher Str. 68
D - 82031 Grünwald (bei München)
The first quarter of the year 2006 has not passed yet, but in view of tomorrow’s pronouncement of the long awaited fundamental judgement by the German Federal Constitutional Court, it is clear that this is the year of decisions.

The Federal Constitutional Court’s decision will certainly result in some kind of liberalisation, though the question of its extent remains open. How is the Federal Constitutional Court going to balance its reasoning, taking into account the freedom to choose one’s profession as well as police law (youth protection, the protection from gambling addiction etc.). We will be able to give you a first appraisal after the judgement’s pronouncement tomorrow.

Several Community Law related questions will have to be resolved in the near future. The European Parliament’s decision to exempt gambling from the Services Directive represents a political compromise and does not signify, that the freedom to provide services and the Gambelli Criteria do not apply to gambling anymore. Germany and other Member States sealing off their markets are facing Infringement proceedings. In the court trails fallowing these proceedings, the ECJ is not limited to the questions referred to by the national courts, but can comprehensively comment on the whole issue (i.a. on competition law). Astonishingly, the EFTA has already passed this stage. Its Supervisory Authority has already brought action against Norway for having introduced a national monopoly on gambling machines (see the following report).

Several Italian follow-up cases to Gambelli (i.e. Planica case-no. C-338/04) have been pending before the European Court of Justice since 2004, after an increasingly inconsistent jurisdiction on this subject had emerged in Italy. The ECJ may use these cases, in order to further clarify the Gambelli Criteria as they have been grossly disregarded by some national courts.

Another thrilling question is the role Competition Law will play for the gabling- and betting market. The Federal Court of Justice (BGH), in its /Faber/ decision had held, that the cartelising of providers in the Deutscher Lotto- und Toto-Block was not unproblematic in the view of competition law. The German Cartel Authority recently pointed out, that the remaining competition had to be protected. The Deutsche Lotto- und Toto-Block will not be able to continue its market allocation and market foreclosure strategy. It must not dictate the conditions to distribution.

Fortunately not only the courts, but the investors too may eventually come to a decision. Numerous Betting- and Gambling Operators strive to the stock market. Things remain exciting.