The Court of Justice of the EU (the "Court of
Justice") has delivered a judgment in a series of joint cases
that questioned the legitimacy of the organisation of betting and
lotteries in Germany, stating that the current state monopoly on
gambling is "unjustifiable" and against EU laws.
In Germany, jurisdiction over gambling is shared by the federal
State and the individual Bundesländer (Länder).
In most cases the Länder have a regional monopoly for the
organisation of sporting bets and lotteries which is run by public
monopolies, while bets on horse racing and the operation of gaming
machines and casinos are licensed by the Länder to private
The German public gambling monopoly was governed by the German
treaty on lotteries (Lotteriestaatsvertrag), and later,
the German treaty on games of chance
(Glückspielstaatsvertrag), which disallows all
organisation or intermediation of public games of chance on the
internet. Eight online gambling providers challenged this law in
various German administrative courts, who in turn asked the Court
of Justice to rule on the compatibility of the German restrictions
on games of chance with European Union law.
In previous cases, the Court of Justice has held that
restrictions on gaming activities might be justified by imperative
requirements in the public interest, such as consumer protection
and the prevention of both fraud and incitement to squander money
on gambling. Such restrictions on the EU principles of the freedom
to provide services and the freedom of establishment can only be
justified on the condition that they are suitable for ensuring the
achievement of the said objectives by contributing to limiting
betting activities in a consistent and systematic manner. The said
restrictions need to be both suitable and must be limited to the
restrictions necessary for that purpose. The Court of Justice
has held that the national courts need to ensure that the
consistency and the systematic manner of the restrictions are
In its judgment this week, the Court of Justice ruled that in
the present cases, the German rules do not limit games of chance in
a consistent and systematic manner. Germany had undermined its
consumer-protection argument by letting state-run gambling
companies engage in "intensive advertising campaigns" and
by permitting a proliferation of privately operated automated
gambling machines, which the Court of Justice said were highly
The Court of Justice held that: "In such circumstances, the
preventive objective of the state monopoly can no longer be
pursued, so that the monopoly ceases to be justifiable".
The Court of Justice went on to state that the national rules
are contrary to the fundamental freedoms of the EU and cannot
continue to apply during the time necessary to bring it into
conformity with EU law.
Although this statement in isolation may sound as if the state
monopoly on gambling is a thing of the past, the Court of Justice
stressed that Member States have a broad discretion in determining
the level of protection against the dangers emanating from
gambling. Member States are not required to recognise
authorisations issued by other Member States in that area and may
also prohibit internet gambling.
It remains to be seen whether this judgment will lead to an
opening of the German lottery and betting on sports events or
whether the German monopoly will rather limit its advertising
campaigns and introduce stricter controls on casino gaming and
gaming machines in order to control gambling in a consistent and
To view Community Week, Issue 488; 13th September
2010 in full,
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