EU Court Slams German Gambling ‘Monopoly’

(CN) - Germany cannot penalize a woman for running an unlicensed sports-betting scheme for an Austrian company as long as German authorities continue to allow an illegal gaming monopoly, the EU high court ruled Thursday.

German authorities charged Sebat Ince with running an unlicensed sports-betting scheme, using a machine installed in a sports bar in Bavaria. Ince's machine collected bets for an Austrian company which was also not licensed to do business in Germany.

For the first part of Ince's infraction, sports betting was restricted to a single public monopoly and private operators were barred from the industry. But after the European Court of Justice ruled the monopoly was illegal and called on German courts to decide the future of the gaming industry, the courts split as to how to let private operators in on the action.

Specifically, the German courts disagreed as to whether a fictitious authorization procedure - examining private operators individually to see if they met the criteria applicable to the public monopoly - should be employed. Accordingly, no private licenses have been issued using that procedure.

In the meantime, German states agreed to an amendment of the gambling rules in 2012 which contained an experimental clause that would have allowed up to 20 private operators to obtain seven-year licenses to run sports betting operations. But as of 2015, none of the 20 licenses had been distributed and the court hearing Ince's case concluded the public monopoly on gaming in Germany was still alive and well - despite running afoul of EU law.

The court hearing Ince's case asked the European Court of Justice for guidance on what to do with Ince, given the illegal gambling monopoly and the fact that apparently only theoretical licenses were available to her.

In a 13-page preliminary ruling issued Thursday, the Luxembourg-based high court said the continued existence of an illegal gaming monopoly in Germany bars authorities there from prosecuting anyone for running an unlicensed sports-betting scheme.

Furthermore, even where as here Ince can theoretically apply for and receive a license to do business, the EU high court ruled that she can't be penalized as long as private licenses are never given out and the illegal monopoly continues to rule the roost.

The court also noted that some portions of the old gaming laws were still on Bavaria's books at the time in question, which further bars authorities from prosecuting Ince.

However, the German court must decide whether Ince may have violated rules prohibiting Internet gaming, telemedia bets and advertising her games of chance on the Internet and TV, the high court concluded.

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