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The state of Germany’s online gambling industry is a mess, to put it lightly. The German state, or Land, of Schleswig-Holstein has announced that it intends to join the other 15 states in the State Treaty on Online Gaming. In doing so, it would end its de facto rebellion as the only German state to go against the national treaty, finally making online poker illegal across the country.

The treaty was ratified in July 2012 and permits only online sports betting, banning online poker and casino gaming. Additionally, just 20 sports betting licenses will be issued in Germany. Schleswig-Holstein, on the other hand, has had no restrictions on the number of licenses it may grant. It granted a dozen online poker licenses in December to such companies as Ladbrokes, 888 Holdings, Betfair, bwin.party, and PokerStars (through subsidiary ElectraWorks). The state has also issued 15 sports betting licenses.

So why the change? In June, a new ruling coalition came into power, and unfortunately, that coalition is extremely anti-online gambling. It proclaimed that it will attempt to repeal the Land’s Gambling Act and sign on to the national Treaty. In fact, it wanted to revoke all existing licenses, but realized that would be illegal so it reluctantly allowed those licenses to remain intact.

Schleswig-Holstein even issued a warning to new licensee MyBet when the company’s CEO Mathias Dahms told the newspaper Kieler Nachrichte, “We believe that we can use the license immediately for all of Germany.” The state sent the company a letter, reminding it that it was only permitted to accept customers “who are resident or ordinarily resident in Schleswig-Holstein.”

The European Gaming and Betting Association (EGBA) submitted a formal complaint to the European Commission (EC) claiming that Germany’s Treaty violates European Union (EU) law. Many online gaming firms continue to offer their services to the country’s residents, as they share the EGBA’s beliefs. The EC also agrees, but rather than coming down hard on Germany, it instead opted in March to simply give the German state governments two years to prove that their gambling laws jive with EU regulations.

The Schleswig-Holstein parliament will hold a vote on January 23rd to determine whether the state will join the treaty; the vote is expected to pass. The EU, despite its objections and serious problems with the state’s decision, has done nothing about the upcoming vote. Should the vote pass, it is anticipated that Schleswig-Holstein will join the other states on March 7th.

There is a chance this decision could backfire for Schleswig-Holstein, as it is possible that even though the EU has done virtually nothing to this point about Germany’s online gambling laws, it might finally take action and force the state to fall in line with European Union law.

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