The European Commission could bring procedures against the 15 states involved. A similar situation arose in Italy where its practices concerning the granting of online gaming licences could be looked on as being protectionist. It remains to be seen whether the other 15 German states will follow Schleswig Holstein’s lead and introduce their own laws to liberalise online gambling.
In Germany the 16 federal states have a state monopoly on online gaming. Sports betting and lottery games are legal in Germany however online casino games and online poker are not. Earlier this year the European commission rejected the German states’ claim that they wanted to ban online casino and poker games as they may cause gambling problems or be used for money laundering.
Online gaming operators seeking to enter the German online gambling market have criticised the states’ new proposals as they claim that they will be more favourable to state monopolies and hinder efforts by other operators. Fifteen of the German federal states proposed this plan, the Draft State Lottery Treaty, for online gambling but one state Schleswig Holstein in the north of the country has moved ahead of the other states and has liberalised its gambling laws. (See article: Germany Grants Online Casino Licences).
Under Schleswig Holstein’s new online gambling laws introduced in September 2011 players can legally take part in online roulette, baccarat, blackjack and sports betting and play slot machines and poker.
Recently Schleswig Holstein granted three licences that will run until 2018. They were awarded to the British betting exchange and online casino company Betfair, to mybet which is a subsidiary of the German Jaxx AG group and to the state lottery Nordwest Lotto. Other licences for casino games and poker will soon be awarded. The online operators who are granted a licence will have to pay a 20 percent tax on gross profits. This is more advantageous to the online casino operators than the 16.66 tax on revenue which is sought by the other states.In contrast to the granting of licences by Schleswig Holstein to online gambling companies based both within and outside Germany but within the EU, the other 15 states sought by their proposals to keep competitors out of the country and so contravened European Market regulations by impinging on European Union operators’ freedom to provide services to other member states.