German protectionism costs Tipp24 jobs

The disastrous consequences of Germany’s exclusive gambling policies under the German Interstate Gambling Treaty were showcased this week in a press release from the major German Internet lotto provider Tipp24 AG. Hounded out of its own country, the firm has transferred operations to the more enlightened environment of the UK, shedding 139 out of 154 German jobs in the process.
When the second stage of the State Treaty on Gaming came into force on 1 January, 2009, Tipp24 AG was forced to drastically reduce its business activities and discontinue its previous internet-based brokerage business for participation in games operated by ‘Deutscher Lotto- und Totoblock’ as a result of prohibitions introduced by the new gaming legislation, the statement reveals.
The Tipp24.com website has since been operated by Tipp24 Services Ltd., based in London, resulting in the loss of German jobs.
The company statement reveals that just 15 employees will remain in service at its headquarters in Hamburg due to Germany’s controversial Interstate Gambling Treaty, which was enacted on January 1, 2008, and prohibits Tipp24 from conducting any form of lottery brokerage online in Germany in competition with German state gambling monopolies. The affected employees will cease working for Tipp24 AG by 31 March 2009 at the latest.
“We are forced to lay off the majority of our staff as the new State Treaty on Gaming forbids us from any form of lottery brokerage via the Internet in Germany,” says Jens Schumann, Chairman of the Executive Board of Tipp24 AG.
“The majority of these jobs will probably be replaced by new ones abroad – where the restrictions do not apply,” he added. “At the same time as the German state is spending billions to save German jobs, it is also destroying the jobs of a healthy, mid-size company with a law which contravenes EU legislation.
“Moreover, Tipp24 AG transferred around EUR 130 million in tax revenues to the federal states last year alone. This money will now no longer be available to the state.”
Tripp24’s statement goes on to recap the background to the State Treaty on Gaming. The legislation forbids the online marketing and advertising of lotteries, allegedly to protect problem gamblers. There have been no scientific studies to date, however, which prove the government’s claims of a sociologically relevant ‘lottery addiction’.
“It seems more likely that the state treaty is designed to eliminate private companies under the pretext of preventing addiction,” Schumann asserts. “After all, controlling addiction would be much more effective via the Internet than at the lottery kiosk. We will therefore continue to take legal action against the new state treaty.”

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