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FCJ Delivers Ruling

The Federal Court of Justice (FCJ) has ruled in favour of banning online gambling operators in Germany. Judge Joachim Bornkamm explained: “Because of the greater dangers of the internet, above all anonymity, lack of social control and accessibility at any time, this sales venue can be subject to stricter regulation.”

While seemingly a big blow to gambling operators in Germany, the ruling will only be valid until the end of the year. Current legislation, under which the state holds a monopoly on sports betting and lotteries, is due to expire on January 1, 2012. Online gambling should receive more favourable treatment in upcoming legislation. According to reports, state leaders are expected to agree upon a new State Gambling Treaty by December 16.

Changes need to be made. The European Commission issued an opinion this summer against the proposal backed by 15 of Germany’s 16 Länder, which calls for a restrictive opening (only seven licenses) of online sports betting based on a hefty 16.67% turnover tax. According to data published in eGaming Review, H2 Gambling Capital projects that under current proposals a regulated market in Germany would only capture 7% of total online gambling activity.

Shares of bwin.party dropped as much as 12% before closing down 7% at 119.2 pence. A spokesperson for the company said: “The ban violates European rules and won’t last. A regulated market opening is the only way to combat the black market in Germany and to comply with EU requirements.”

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