Germany Receives Blue Letter from EC over State Treaty on Sports Betting

• Newly proposed German sports betting legislation has become a cause for concern for the European Commission
• General Director of the European Commission Lowri Evans looks into the matter by handing German lawmakers a blue letter
• Germany’s interim sportsbook licensing falls under scrutiny

Following Germany’s submission of their revised sports betting legislation to the European Commission, questions arise over the reasoning and logic of the stipulated regulations.

The Blue Letter

A blue letter is the formal path through which the EC requires member states to elaborate further on articles and items of a proposed legislation. This comes in advance to a launch of full-blown infringement proceedings, giving the member state the opportunity to reason their decisions.

Such a letter was recently handed down to Germany’s lawmakers in light of their recently proposed State Treaty on matters concerning the legality of sports betting and the appropriate licensing procedures.

The German State Treaty was agreed upon by all 16 German states and was submitted for the EC’s approval earlier this month. The treaty itself stipulates the terms and regulations of the newly decided upon sports betting licenses for operators willing to provide such services to German citizens on German territory.

“Evaluation of the Appropriateness and Effectiveness”

The general director of the European Commission, Lowri Evans, has looked down upon the lengthy requirements of this otherwise placeholder of a solution, presenting the blue letter in response to the proposed legislation.

Evans acknowledged the fact that the Treaty gives the opportunity for the said licenses to be extended by three years, but openly criticized the lack of stimuli, which the legislation presents to sportsbook operators.

Among other things, operators will be required to shut down all other gambling operations in order to be able to obtain a sports betting license, which will disallow in-play betting. Players will also experience the restrictive regulations of the State Treaty, as they will be limited to spending no more than €1,000 a month.

Other questions and doubts arose over the effectiveness of the State Treaty, mainly concerning how attractive exactly is licensing going to be for operators and how Germany sees this legislation as capable of driving unauthorized sports betting vendors out of the market.

This is the third instance in the last decade, in which Germany attempts to draft a State Treaty on online betting matters, and only one in a long line of instances. In a nutshell, their 2012 attempt concluded in a legal fight with operators, as the Treaty was seen as imposing unjustified restrictions on the freedom of the operator to provide their services in the EU, mainly due to a limit of 20 license. This was followed by a revised stance, which prohibited online casinos and poker games, but at the time not all states seemed to agree with the provisions.

A Brief Glance over Current State Treaty Requirements for Sports Betting Licensing

Procedures for obtaining a sportsbook license in Germany will commence on January 2nd, 2020. Operators will be required to present all the necessary documentation, regardless of whether or not they are already in possession of such a license, and declare their satisfaction of having completed their application. The new rules and regulations also require for each sportsbook operation to write out plans concerning social responsibility and preventive measures for addiction / problematic gamblers among others.