According to a highly respected financial magazine, there is a battle brewing in Europe between one of the member European Union countries and a top player in the online gaming and poker industries regarding proposed regulations for the nation.
In an article on the Financial Times website written by James Wilson on November 30, the online gaming outlet Betfair has challenged the legality of proposed regulations in Germany. As directed by members of the EU, member nations have the right to propose legislation and regulation for their nation (to protect its citizens against problem gambling, for example), as long as such regulation doesn’t unfairly close the market to outside competition. According to Wilson, Betfair feels that the current proposals in place by the German government unfairly restrict such companies from outside the country to compete fairly for German players.
The debate comes on the heels of a decision by the European Court of Justice, which last year ruled that the existing rules in Germany constituted a monopoly that violated the treaties that all Member Nations sign as a part of being with the EU. Fifteen of the sixteen states that comprise Germany have rewritten their online gaming laws (the sixteenth state has proposed regulations that online outlets are apparently pleased with), but Betfair believes that the updated regulations still do not provide for adequate competition and, in fact, still constitute a monopoly.
Wilson quotes Martin Cruddace, the chief legal and regulatory affairs officer at Betfair, as saying, “The salient points of the European Commission’s detailed opinion have, as of yet, not been addressed. Under these current proposals, Germany’s new state treaty will be out of line and out of touch with fundamental EU law.”
The new regulations being proposed by Germany would expand the number of companies that can operate in Germany from seven to twenty. The regulations would also lower the tax rate. The proposed new German regulations are supposed to be put to the European Commission in Brussels in time for each state to enact the laws by December 15. Betfair believes, however, that there is little changed in the new regulations and that the new proposal makes a potential German monopoly even more likely.
Although online gaming and poker are freely regulated in Europe, there are many countries that have placed stringent guidelines on international companies or have put in place regulations that, in essence, have nationalized their operations. France and Italy, for example, requires that any online operation be nation specific and not allow people from outside the country to play on the site. This has brought out such new sites as PokerStars.fr and PokerStars.it, which currently rank as the sixth and seventh largest online poker outlets in the industry, according to PokerScout.com.
Other countries in the EU have enacted state run gaming operations, which has drawn the ire of the European Commission. In Sweden, Svenska Spel is in charge of online gaming options such as poker and the lottery. Its online poker operation is ranked in the Top Twenty in the online poker industry.
The eventual outcome of the proposed German regulations should be known within the next two weeks and – if the proposed new laws go into effect – could be in operation at the beginning of the next year.
