German Gambling Rules Mined by EU High Court

(CN) - A temporary relaxation of the ban against Internet gambling in one German state did not automatically open gaming up to the rest of the country, Europe's highest court ruled Thursday.

The state of Schleswig-Holstein allowed web-based gambling for qualified operators over 13 months beginning in 2012. Although it has since repealed the loosening of restrictions, the state has allowed the authorizations it issued during that time to remain valid for several more years.

Meanwhile, a German court ordered Gibraltar-based Digibet to stop offering Internet gaming to German customers after a complaint by the state-run public lottery in North Rhine-Westphalia.

Digibet appealed that order to Germany's federal court, claiming that the liberalization of Internet gambling rules in Schleswig-Holstein had undone such restrictions in other states. The company based its argument on the freedom to provide services, which is considered a fundamental right of EU citizens.

But the European Court of Justice held Thursday that the public interest can justify curtailing business freedoms with gambling restrictions in member states. Consumer protection, fraud prevention and gambling addiction are valid reasons for states to restrict gambling, the court said.

"In that context, the court has repeatedly stated that the legislation on games of chance is one of the areas in which there are significant moral, religious and cultural differences between the member states," the Luxembourg-based court wrote. "In the absence of harmonization in the field at EU level, it is for each member state to determine in those areas, in accordance with its own scale of values, what is required in order to ensure that the interests in question are protected, and the identification of the objectives which are in fact pursued by the national legislation falls within the jurisdiction of the national court."

While the court acknowledged that Schleswig-Holstein's temporary loosening of gaming rules may have created a brief inconsistency in Germany as a whole, the legislation was brief and geographically restricted to only that state.

"Therefore, it cannot be argued that the derogating legal situation in one German state seriously affects the appropriateness of the restrictions on games of chance applicable in all the other states to achieve the legitimate public interest objectives that they pursue," the court concluded.

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