Any attempt to quickly
fix Germany’s sports betting licensing process by doubling the number of available
licences looks set to fail after a Wiesbaden court ruled that limiting the
number of licences is illegal under European Union law.
The Fifth Chamber of
the Administrative Court of Wiesbaden ruled that the body responsible for the
licensing process, the state of Hesse, is obliged to award a licence to all
applicants who meet the licensing criteria.
The ruling is the
result of a challenge filed by Tipico in September 2014 and states that
restricting the number of licences to twenty constitutes an infringement of
European law, namely the freedom to provide services under Article 56 of the
Treaty of the Functioning of the European Union, as well as the principle
The court reached its
decision because the state of Hesse failed to satisfactorily explain how
the restriction can be justified.
[Tipico] thus would obtained the coveted concession, since it otherwise meets
all the requirements,” Court spokeswoman Patricia Evers said. “The court may
give Hessen leave to appeal this decision.”
Tipico chief executive
Jan Bolz commented: “This ruling clearly states that Tipico meets all
qualitative criteria to obtain a sports betting license in Germany and that
there cannot be any doubt about the legality of our business activities.
“As the leading
provider, we will do our part and continue to constructively help paving the
way for legally compliant regulations in Germany.”
This ruling could have
far-reaching implications for the German licensing process following the
rejection of proposed changes to the State Treaty on Gambling by the Minister
Presidents of Germany’s 16 states.
HMDIS had proposed
removing the licence limit and legalising poker and casino games as well as
online sports betting, but this was rejected in
favour of doubling the sports betting licence cap to forty.
"A German court
has found that the limit on the number of sports betting licences is contrary
to European law for the first time,” German Sports Betting Association (DSWV)
president Mathias Dahms said. “Following the judgement all candidates that meet
the qualitative requirements qualify for a licence.”
“A limitation to 40
concessions is as arbitrary as a restriction on 20,” Dahms explained. “We call
on the Minister Presidents to reconsider their plans.”
Dahms noted that HMDIS
revealed during the trail that 85 companies had applied for a licence,
with 79 were already paying betting tax in the country.
“The State Treaty on
Gambling must be fundamentally reformed to finally establish legal certainty,”
he added. “The State of Hesse has already submitted a constructive proposal.”