German Court to Sustain Notion for Online Lottery Betting Prohibition

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  • Koblenz Higher Regional Court confirms stance against betting on lottery results
  • Unnamed Gibraltar-based defendant appeals this decision, arguing it goes against EU law
  • Whether or not the matter will reach higher authorities remains unclear

Tuesday saw the Higher Regional Court of Koblenz, in the German state of Rhineland-Palatinate, uphold the country-wide prohibition of so called “secondary lotteries” citing violation of the German laws.

The Online Betting Ban across Germany

The original ruling was handed down in early July but its origins can be traced back to October 2018 in a court appeal by the state lottery Lotto Rhineland-Pfalz, which had sought court intervention, as according to their reports these secondary lottery services had pulled roughly 7% of their 2017 revenue.

July’s ruling saw an unspecified Gibraltar-based operator of such secondary to state lottery betting services prohibited from offering their business to German citizens. The defendant in question is said to be the a betting operator for a range of international and regional lottery units, including an odds and results information provider, under which scope are German lottery games such as LOTTO 6aus49, and EuroJackpot.

The Case

The defendant’s appeal reasons that the courts’ ruling goes against the regulations stipulated in the German State Treaty, which received its first temporary outline just recently. The litigant further added that German state lotteries had been in violation of European Union laws for cross-border trade.

However, this appeal was quickly turned down by the regional Higher Court, which argued that secondary lotteries do not answer to the State Treaty’s definition for lotteries but act for observing entities, which draw their business essence on the back of state lotteries. ‘Primary’ lotteries, on the other hand, are solely responsible for the outcome of their draws.

The said court also dismissed the EU trade agreement accusation by pointing out that EU member states have the right to limit gambling markets, should a concerns over civil matters or underage participation arise. Overall, the German Higher Court left no space for speculation over the matter concerning secondary lotteries, which fits the growing European tendency to dismiss this branch. Just a few months ago the Association of European Lotteries stated that it is determined to run betting operators out of their territory. Australia has also clamped down on lottery betting earlier this year.

This might not be the last we hear of this, though, as the European Commission’s concerns over Germany’s handling of online gambling matters have become the occasion for a “blue letter”.

European Commission’s Concern over Germany

In brief, Germany’s short term online sports betting licenses, which are about to come in force at the start of the working days of 2020 require operators to participate in a greatly detailed procedure, which will grant them a temporary license, valid only through to July 1st, 2021. German states have stated that by that time they will have developed a more long-term solution to their sports betting legislation, but the EC seems to be concerned over the fact that the application procedure and the short term licensing will not provide for a sufficient stimuli for unlicensed operators to step out of the gray area.

Despite the fact that this would not be the first time Germany has raised concerns in the eyes of the EC, additional considerations arise from the strict limitations Germany is employing over its legalized sports betting, such as a €1,000 monthly limit per customer, the 5% turnover tax and others.

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