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Schleswig-Holstein Gains Approval for German Federal Treaty

German state Schleswig-Holstein received approval from the European Commission to adopt the Federal Interstate Gambling Treaty.  Beginning on 7 March 2013, the Lander will follow the regulations outlined in the controversial and restrictive federal treaty, which was ratified by the other 15 states in July of 2012.

After issuing 15 sports book and 12 casino licenses during the second half of 2012, the Schleswig-Holstein government will adopt legislation that bans most forms of online gambling except sports betting.  The Lander originally created separate regulations that contained business friendly stipulations and allowed several forms of online gambling, including poker.  Major operators such as PokerStars and Bwin.Party obtained licenses to operate online casinos and sports book within the region’s borders.  Operators and industry analysts praised the legislation and sought to use it to question the controversial and restrictive federal treaty.  Despite support from the pro-gambling contingents, Schleswig-Holstein officials insisted that it would eventually conform to the federal treaty.

In response to the Lander’s future plans, the European Commission and the European Gaming and Betting Association (EGBA) released simultaneous statements against the decision to abandon the progressive regulations.  EGBA Secretary General Sigrid Ligne stated that “Schleswig-Holstein’s proposed move from a sustainable and EU compliant licensing system to an inconsistent and unjustifiably restrictive regime would be a significant step backwards, one that-as confirmed today-the European Commission cannot approve.”

After a month-long review, the European Commission changed its opinion and decided to approve changes to the Schleswig-Holstein legislation

The European Commission decision further increases the confusion and uncertainty for one of Europe’s major gambling markets.  The Federal Interstate Gambling Treaty is currently being scrutinized for its restrictive nature and its non-compliance with European Commission regulations.  Furthermore, German government officials will have to figure out how to deal with the 27 licenses that were issued by Schleswig-Holstein in 2012.  Since the Lander issued specific licenses for federally banned forms of gambling, government officials will have to determine a course of action to solve the conflicting interests.

Operators were disheartened by today’s news and will await the confusing and complicated process in Germany.  These corporations look forward to January 24 when the German Courts will determine the legality of the Federal Interstate Gambling Treaty.  For now, a potential €1 billion market will remain in a state of confusion and disarray. 

 

 

 

 

 

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