National Prejudice – Home Bias towards Foreign Gaming and Betting Operators
Same protection in Malta?
Reservations towards bookmakers licensed in other EU Member States are evident in the administrative jurisdiction as well. In its decision of 3 August 2006, the Bavarian Administrative Court of Appeal for example raised doubts as to the standard of protection applied in Malta. The “dangers associated with sports betting” would not be confronted in the same way. Can Germany really tap itself on the shoulder and feel it can do everything better than other Member States ?
Protection against gambling addiction: unsatisfactory
Unlike the German state operators who “discovered” protection against gambling addiction only on 28 March 2006, the day the Federal Constitutional Court pronounced its fundamental decision on sports betting, this aspect of gambling has played a vital role in other EU Member States and – unlike in Germany – has been controlled as well. Many Austrian, UK and Maltesian operators care a lot more for the protection of gambling addicts than the German state operators. Many foreign operators have been offering the blocking of accounts or the limitation of wagers. In the UK, independent counselling organisations, such as Gamcare, are effectively being supported by the gaming industry.
Misleading advertising in Germany
Similar is true for advertisements. In the EU Member State Malta for example, a rigorous Code of Conduct on Advertising, Promotions and Inducements applies to gaming and betting operators. For example, it is expressly forbidden to suggest that gambling is a form of financial investment. German state operators handle this differently. The SKL, the South German State Lottery, for example, is being promoted with the misleading statement: “Investment: EUR 12,50 – Yield: Up to EUR 5 m”. In other aspects, advertising for lotteries, casinos and other forms of gaming by state operators is often coarsely misleading as well, without any supervision by an independent supervisory authority, as it is current practice in other EU Member States.
Protection of minors: nonexistent
In Germany the state monopoly is regularly justified by the argument that only the German state operators were able to guarantee effective consumer and youth protection. This is wrong, of course, as consumers and minors are effectively protected in other EU Member States as well and this being supervised as well. In Austria for example, minors are barred from participating in gambling, whereas a similar regulation was introduced in Germany by the Interstate Treaty on Lotteries (Staatslotterievertrag) only two years ago. However, the Free State of Bavaria recently had to admit that this prohibition has only be controlled for one year.
In practice though, things have not changed as proved by a test commissioned by Bet 3000 AG and conducted in Munich in August 2006. Two adolescents well under the age of 18 (13 and 15 years old) tried to place sports bets in 13 state acceptance offices on 2 August 2006. Only three acceptance offices rejected their bets, whereas they were able to place bets with ten acceptance offices despite the alleged control of the prohibition of under age gambling.
Refusal of a bookmaker’s permit for the State Lottery Administration?
Apparently, protection of minors is being advanced in order to deny market access to foreign operators who really do care about protection of minors and in fact do prevent them from access to sports betting. The State Lottery Administration, Bavaria’s state gambling operator, due to an evident lack of reliability would therefore be without a chance to be licensed as a bookmaker in Austria. Under UK law it would probably not be regarded as “fit and proper” either.
Community law principle of mutual recognition
As we already reported, the ECJ will probably pronounce its judgement in the joined cases of Placanica et al. (case-no. C-338/04, C-359/04 and C-360/04) in October or November. The Advocate General came to the conclusion that the supervision in the bookmaker’s country of origin was sufficient. The Italian approach to invoke the territorial character of the licensing procedure was in breach of the principle of Community loyalty. On the basis of the principle of mutual recognition the Advocate General concluded: “If accordingly, an operator from another Member State fulfilled the legal requirements in effect therein, the authorities of the state in which the service is to be offered, have to act on the assumption that this is a sufficient guarantee for its integrity.” – a clear rebuff for national haughtiness.