Interview with Dr. Wulf Hambach – Attorney at Law

Reinhold Schmitt
ISA-GUIDE Chefredakteur (V.i.S.d.P.)

He gathered experience abroad in various places, including at the German American Chamber of Commerce (Deutsch-Amerikanische Außenhandelskammer) in Houston (USA). From 2000 until 2001, he worked for the renowned Business Law Firm, Westphal Voges und Krohn, as well as for the media company, Verlagsgruppe Milchstrasse in Hamburg. Up until 2005, he practised in the area of gambling and betting law at the law firm, Arendts Anwälte.

He is co-founder of the law firm, Hambach & Hambach, and specialises in the following areas of law:
  • International and European Betting and Gambling Law
  • Media Law
ISA-CASINOS, Editor of Chief, Reinhold Schmitt: What position do you have?

Dr. Wulf Hambach: I am an attorney and co-founder of the law firm, Hambach & Hambach.

ISA-CASINOS: Which areas of law do you specialise in?

Dr. Wulf HambachHambach: My area of specialisation and the focus of the law firm lies exclusively in the area of International and European Gaming Law. In German Gaming Law it is remarkable that the term „Games of Chance“ is used is all areas of gaming. But this term may not be taken literally. With new types of bets such as, e.g., financial bets or a combination of online games, there are not yet any established (legal) values based on experience. Why: The German legislator is acting particularly sluggishly in this area (apart from its implementation of the State Lottery Treaty (Lotterie-Staatsvertrages) which is incompatible with both the German Constitution and European Law). It is currently being left up to the courts to provide legal clarification, although the German legal system is actually based on the codified system and not on the case law system.

ISA-CASINOS: Are you still practising in other areas besides in Sports Betting Law?

Hambach: Besides advising both German and foreign clients in the area of Sports Betting Law, I advise companies specialised in online and offline gaming and this on a National (German) level as well as internationally.
The legal branch of (International) Gaming Law encompasses a number of interrelated legal areas, in order that my work is shaped by the expansive nature of the subject area. The fundamental areas are Online Law, European Law, Administrative Law, Criminal Law as well as Media Law. With regard to the subject of financial bets, the regulations in Banking and Investment Law play an important role. In relation to this, my business partner and brother, Attorney Claus Hambach, who has been an Attorney in banking and Investment Law for the last six years, can provide more precise information. He is of the opinion that in the near future, financial bets and digital options will create more and more interest, in particular for risk-loving private investors, as these offer considerable advantage over the capital and trading possibilities available on the stock exchange from shares or conventional financial derivatives. In particular, the simple construction of the new financial instruments makes the trade interesting for investors – in contrast with the complicated nature of the market and stock determinations associated with the classical options. The „pure financial bets“ trade (Binary Bets, Fixed Odds and Spreadbets) requires no aptitude for bargaining as is required by the classical stocks.

ISA-CASINOS: You have founded the firm with your brother. Are there any particular reasons for this?

Hambach: The union with my brother has many reasons. For one, it is in its truest sense, an „affair of the heart“, as the interpersonal relationship between us has – for as long as I can remember – been exceptionally good. Team spirit is particularly important to us and this has been further developed across the last number of years of our working together. Last but not least, the professional complement – as indicated above – is a fundamental reason for this union.

ISA-CASINOS: How did you come to the branch of sports betting law?

Hambach: Even as a child, I was passionately interested in professional sport. When I got the chance to advice a sports betting client, I was immediately hooked and have been continually expanding in this area since.

ISA-CASINOS: You represent one of the largest providers of sports betting worldwide. What are the critical legal issues at present in Germany for your clients and for other foreign providers?

Hambach: The State monopoly, which is established by the State Lottery Treaty as well as by the individual state laws (in conjunction with Art. 284 of the German Criminal Code (StGB)) must be penetrated. The indication that the above mentioned laws are incompatible should not only be overcome in individual court decisions. I would consider effective media publicity – at a national as well as an international level – to be another critical issue.

ISA-CASINOS: In relation to this, has the Gambelli Decision not changed the situation somewhat drastically?

Hambach: Definitely. The State Lottery Treaty (Staatsvertrag zum Lotteriewesen), in particular, is in conflict with the guidelines as laid down in the Gambelli Decision. The consistent policy on restrictions stipulated by the ECJ for the Member States is not being adhered to in Germany. The inconsistent behaviour of the Federal States, namely that, on the one hand, they wish to prosecute the private provision of gaming and on the other, that they are continually making new gaming offers available (cue: Keno) and aggressively advertising these, has become sufficiently well known and is not tolerated by many courts. The football scandal has revealed the considerable deficit in the State’s ability to prevent fraud. If the ECJ stipulates (in margin no. 67 of its decision) that restricting sports betting to state providers may only be allowed, for example, to prevent fraud, then this stipulation is clearly not being followed in Germany.

ISA-CASINOS: In the area of sports betting, you are very active at a European level. For example, you recently wrote for the 7th edition of the „Internet Gambling Report“. How does the legal situation in relation to sports betting look in the other European States?

Hambach: It varies. On the one hand, there are Member States where the sports betting market is in the hands of private providers. Corresponding betting laws ensure there that the market functions without any friction or scandal. In relation to this, Great Britain, Austria and small states such as Malta are exemplary. On the other hand, there are Member States such as France, Denmark and Germany, where a state monopoly exists. What is particularly striking is that in the states, which have decided on controlled privatisation, no more problems arise than in the states with state monopolies. The football scandal, which is creating a fracas in Germany at the moment, reveals unambiguously that state providers are not immune from manipulation either.

ISA-CASINOS: From a long term point of view: Do you think that Germany will be able to fence off the drive to liberalise on a long term basis?

Hambach: No. The same fate is in sight for the state sports betting monopoly as has already happened to the other state monopolies, e.g., the state telecommunications monopoly. The multitude of court decisions endorsing liberalisation (e.g., the Upper Administrative Court (VGH) of Hessen, Schleswig-Holstein, Saxony) have already prepared the way.

ISA-CASINOS: Is there an EU unification of the law in relation to sports betting and gaming in general in view in the foreseeable future?

Hambach: Brussels intends to bring about a harmonisation – that is certain. How this harmonisation in the area of sports betting will be is however still up in the clouds. It is worth wishing for an EU Directive which would harmonise gaming in Europe. In relation to this, Brussels is still in the discussion phase. In January 2005, the EU Commission commissioned the „Swiss Institute of Comparative Law“ to undertake a study on the analysis of the situation and development of the Union for services in the area of sports betting. At the end of the year, the Institute will present its result to the Commission on whether the internal market in this area functions smoothly or not. It is my opinion that a clear „no“ is already certain. On the whole, one hears from Brussels that a liberalisation of the market is intended by 2008.

ISA-CASINOS: What a lot of our readers do not fully understand: What differentiates a state provider such as Oddset from a private sports betting provider? What similarities and differences are there?

Hambach: Just like ODDSET does, private providers, who for example have licenses from Austria or England, offer their bets through betting agencies as well as via the Internet. The German Lotto- und Totoblock has no less than 26,000 receiving offices within the Federal territory. The number of private betting offices is estimated at around 500, though most of the operators of these offices are in legal conflict with the authorities.
A fundamental difference is the level of security and protection of users: It is worth noting that most private providers (and their customers) suffered no loss from the DFB-Pokal Game HSV against SC Paderborn in contrast with ODDSET. The reason for this is simple: Most private providers operate with an early warning system such as for example, the system, „Betradar“. If unusually high bets are placed before the beginning of a game, the provider is automatically notified by the system and he can, up until shortly before it starts, remove the game from the bets on offer on grounds of suspicion of manipulation and return the wagers to its customers. Regarding the DFB-Polkal Game, ODDSET should actually have withdrawn the game a day before it took place on grounds of unusual bets, which were placed on the „Underdog“ Paderborn. Because of the system in place, this was, to ODDSET‘s disadvantage, no longer possible. Regarding this, I don’t see merely a blatant breach of consumer protection.

ISA-CASINOS: Where do you see sports betting law in 5 years? And where in 10 years?

Hambach: I would expect that in five years we would have a similar situation to that in Austria: A liberalised but controlled sports betting market. In 10 years, the German betting market would better resemble the English one, i.e., be a regulated betting market. The aim must be to create modern laws to regulate the German Gaming Market which protect consumers. But until then, there is still a long and difficult path before us.

ISA-CASINOS: Is a decision of the Federal Constitutional Court (BVerfG) on sports betting law expected in 2005. What exactly is at issue? Would you dare a prediction of the result?

Hambach: The Federal Constitutional Court will – as it has announced – make a fundamental decision on whether the private provision of sports betting is allowed in light of the freedom of profession guarantee of the operator of the betting office. The Constitutional Complaint of the Munich complainant has already been pending before the Federal Constitutional Court for three years. There are serious signs that the Federal Constitutional Court will hold the restrictive policy of the State of Bavaria over private sports betting providers to be unjustifiable.

ISA-CASINOS: Is a stage such as the ISA-CASINOS important for you?

Hambach: The Platform ISA-CASINOS doesn’t just provide me with a source of information which I can no longer imagine being without. I am particularly pleased that focus is being placed on the legal background to this area.

ISA-CASINOS: What comes to mind spontaneously if you think of amusing events which you have come across during your work?

Hambach: Amusing, though scandalous at the same time, is certainly the conflict which is currently being bashed out regarding the football scandal by ODDSET and the DFB (Federal German Soccer Association). Against the background that the DFB is financing the supporting programme for the World Cup 2006 with the state sports betting, this handling reminds me of scenes from the kindergarden: Push it under the carpet and shift the blame onto someone else.

ISA-CASINOS: If you had three wishes, what would come to mind regarding wealth?

Hambach: In view of the shocking pictures coming from the worldwide war regions of Iraq and Israel: Peace! I would put a happy family life and health next. And of course, I would wish for FC Bayern München to win the Champions League, which I have betted on (not with ODDSET ;-)).

ISA-CASINOS: How do you balance your free time?

Hambach: I am a keen tennis player and travel, as much as my career allows, to the nearby mountains – in the summer to mountain bike and in the winter to ski. I am also a major U2 fan and am really looking forward to the concert in Dublin – Its goin‘ to be deadly!

ISA-CASINOS: Thank you for the discussion.