Germany's sports betting licence cap illegal, Wiesbaden court rules

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 of transparency.

The court reached its decision because the state of Hesse failed to satisfactorily explain how the restriction can be justified.

“The plaintiff [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.”


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