Consequences of the sports betting decision of the Court of Appeal of Munich

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

Arendts Rechtsanwälte
Perlacher Str. 68
D - 82031 Grünwald (bei München)
The Court of Appeal of Munich (Oberlandesgericht München), in its decision of 26 September 2006 (case-no. 5 St RR 115/05), affirmed that transmitting sporting bets does not incur a penalty. Criminal prosecution for illegal gambling in accordance with Art. 284 German Criminal Code was excluded for reasons of Community law as well as of constitutional law.

This final judgement of appeal, which affirmed a sentence of acquittal by the County Court of Landshut (Amtsgericht Landshut), has an important effect on the legal situation in Bavaria. Now, even the public prosecutor asked for a sentence of acquittal in a criminal hearing regarding a sports betting agent. Further sentences of acquittal were announced.

The decision of the Court of Appeal of Munich concerned a so called “old case” which happened before the Federal Constitutional Court’s decision of 28 March 2006. The court, contrary to the opinion expressed by several authorities, clearly clarifies that the current legal and factual situation is infringing Community law. The Court of Appeal states that the current legal situation in Bavaria does not fulfil the requirements for limiting the Community law freedom to provide services (Art. 43, 49 EC Treaty) and the Constitutional freedom of choosing one’s profession (Art. 12 German Constitution).

The requirements set forth by the ECJ’s Gambelli decision for limiting the freedom to provide services on pain of penalties were not fulfilled in Bavaria as evidenced by the Federal Constitutional Court’s decision of 28 March 2006. For the rest, a license duly granted to a bookmaker in another Member State under its national law had to be regarded as a state license in terms of Art. 284 German Criminal Code.

The Court of Appeal thereby appropriately implements the ECJ’s requirements and the Advocate General’s opinion in the joined cases of Placanica et al. The former jurisdiction of the Bavarian Supreme Court (Bayerisches Oberstes Landesgericht) which, in its decision of November 2003, had affirmed punishabilty in accordance with Art. 284 German Criminal Code, was abandoned. According to the present legal situation, sports betting agents are not liable to prosecution. Ongoing preliminary investigations by the public prosecutor and ongoing criminal proceedings (with several hundred people concerned) will have to be dismissed.

This judgement has implications on ongoing administrative proceedings as well, since the orders of prohibition issued against betting offices in Bavaria are exclusively based on an alleged punishability according to Art. 284 German Criminal Code. This legal conception is untenable after the decision of the Court of Appeal of Munich, since the legal question was decided in favour of exemption from punishment. The orders of prohibition therefore were issued without a legal basis. Enforcement measures based thereupon are unlawful. One can assume that the Bavarian Administrative Courts will henceforth enforce the Community law requirements, as they can hardly act on the assumption of punishablitity according to Art. 284 German Criminal Code, whereas the competent criminal courts deny the same.