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State gambling monopoly illegal, EU court rules

The Local · 8 Sep 2010, 11:47

Published: 08 Sep 2010 11:47 GMT+02:00

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The European Court of Justice in Luxembourg ruled that the monopoly was inconsistently and unsystematically applied and therefore “cannot be legally justified.”

The decision came as a surprise because the court has upheld monopolies in other European countries on the grounds that they can be used to cut the incidence of problem gambling.

The German regulation, under which many forms of gambling cannot be operated by anyone other than the country's 16 federal states or companies run by them, was being challenged by a number of private gambling providers.

The court said the regulation was inconsistent: it did not apply, for instance to casinos and slot machines, which could be more dangerous to problem gamblers.

Marketing campaigns run by holders of the monopoly were aimed at boosting profits, in breach of EU laws regarding the freedom of exchange of goods and services.

“Under these circumstances, the preventive goal of the monopoly no longer applies, so the monopoly cannot be legally justified,” the court’s judgement stated.

The regulation must “no longer be applied,” the court said.

Germany will have to end the monopoly immediately, the court said. But it also stressed that a more consistently applied monopoly could be legal if it could be shown to have the desired effect in limiting the social impact of gambling.

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“With a view to channelling the desire to gamble and the operation of games into a controlled circuit, member states are free to establish public monopolies,” the court said.

DPA/The Local/dw

The Local (news@thelocal.de)

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Your comments about this article

12:08 September 8, 2010 by moistvelvet
I wondered why I was prevented from opening an online betting account based in the UK, now why am I not surprised this monolpoly is the usual German behaviour in choising which Euro rules to follow or ignore!
13:02 September 8, 2010 by DinhoPilot
I want my monopoly too... I enjoy that game I always won!
13:09 September 8, 2010 by moistvelvet
Ah but Dinho did you limit the competition and stop others from playing? Because that is how the German state has been winning.
14:03 September 8, 2010 by DinhoPilot

Their country, their rules... Sorry you got pwned by them, but its typical that they will favor their own business than others. It keeps their economy strong and not open to other competition. Unlike in UK where you can have a full hand of providers from whom to choose services, the same doesn't happen in germany (which btw is alot bigger but so limited in offer!). Imagine if every country in europe decides to benefit their owns only...
15:06 September 8, 2010 by moistvelvet
Their country, European rules. Yeah just imagine if all the countries in the EU acted in the interest of the EU as a common market as they agreed to do so. Germany hasn't done too badly jumping in on the British liberal markets of rail transport, communications, postal services and energy, yet they protect they deprive their own citizens of healthy competition and choice and you call that in the national interest?
15:49 September 8, 2010 by DinhoPilot
Well UK is more liberal, German is more conservative. I'm sure you can open here any business (as long you have alot of $$$$$, and make it "national"). Maybe their system protects the economy. For example in here for train there is only DB, in UK you ave Virgin Trains, First, Cross Country, etc... the state doesn't cash so much! But it seems american companies don't have too many problems opening and expanding business. I guess we all need to wait a bit more for their market to get more diverse. With their economy stable, they will always act overprotective! Its funny to see how Aldi in UK has twice more products and diversity than the German one!LOL!

For now this protective model is sustainable, when is not then probably other will come (expect chinese, russian and indian companies buying german ones)

For now that's life. And I think the EU court doesn't have power in these matters! Cheers
16:56 September 8, 2010 by cobalisk
The ruling is not inconsistent.

It states that a gambling monopoly is allowed if it actually works toward reducing gambling. Since Germany's revenue has been used to boost gambling consumption it is not acting in the public good but rather like a corporation invalidating its monopoly exemption. It must reform itself or desist being a monopoly under EU rules.

I realize this may be hard for some to grasp but national monopolies are allowed under certain circumstances.

For those claiming you can't open or operate a private business here, you are completely and utterly wrong. You can operate as a mini-Gmbh with only 1 € capitalization. Yes there are forms that must be notarized and filed with the Fed state you operate from but that is just like anywhere else. Germany is filled with private firms, just like everywhere else that operates a modern economy.
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