In a recent announcement by German officials, the prime ministers of the 16 federal states have declared to defer any decision on creating a State Gambling Treaty until October 2011. This statement was communicated by the prime minister of the Saxony-Anhalt region as a representative for all prime ministers. However, he did express his intent by declaring the country is well on its way.
The Proposal
In April 2011, 15 for the German states forwarded a single proposal to be considered by the European Commission. The proposal delivered the opening of online sports betting within the country on a limited basis. This would be based on a 16.66 percent tax. At this point, the group received flak from the gambling industry due to the high tax rate. The European Commission is expected to publicize its ruling in July.
Deferment By The Prime Ministers
The deferment will give the German states extra time to study the various implication of the potential verdict of the European Commission. One private operator that has considerable interest in the German market is Betfair. The company has commissioned research by German law professor Bernd Grzeszick of the University of Heidelberg. The Professor gave his opinion about the current proposal stating that they would be turned down.
A Violation Within The Proposal
He came to this conclusion because the draft violates Articles 49 and 56 of the European Union Treaty. Also, H2 Gambling Capital, a leading online gaming data company, indicated that if Germany continues with the proposal, it would only capture 7 percent of the market due to citizens preferring to access offshore sites.
A Statement From Betfair Representatives
Betfair representatives released a statement confirming that they are hopeful the prime ministers utilize their time to agree upon an airtight treaty allowing reputable private companies a fair chance at the market which will help protect citizens against black market operations. At the same time, the proposal was applauded by the gambling industry as it was viewed as being less restrictive toward private casino operators.
The drafted proposal aimed at issuing licenses to private operators for all online casino products. The proposal also originally called for a 20 percent gross tax profit. This draft was received by the European Commission in May 2011. The Betfair representative hopes to see this proposal adopted by all states in Germany. The decision made by the European Commission could be a major advancement or a hindrance to the online gambling industry.