Schleswig Holstein online gambling in limbo

Schleswig Holstein’s ruling coalition government was playing its cards cautiously this week as parliament started the legislative process designed to end in the repeal of the German province’s liberal online gambling licensing law .

However, the expected moratorium on the issue of new licenses, and the even more contentious possibility of suspending those already issued, did not materialise.

Instead, a carefully worded statement to parliamentarians proposed that the buck be at least temporarily passed to the European Commission, which under EU law must be given the opportunity to consider and comment on new draft legislation.

Interior Minister Andreas Breitner advised that the repealing measure and moves to return S-H to the restrictive German Treaty on gambling could only be implemented once the EC requirement had been completed.

That process includes a ‘standstill’ timeframe of three months, during which no action may be taken.

Breitner noted that the standstill can be extended by a further month if another EU member state becomes involved with an objection or comment.

In practical terms this means that nothing can happen between this week’s first reading of the bill and the second reading, which is held after the EC has commented on the draft law.

It also means that the current law in force, which provides for the regulation and licensing of online gambling, must stand. And that means that the S-H government can still be required to consider licence applications (and in fact two companies are already suing over delays in issuing their licenses).

Breitner explained that pending EC input the S-H government remains bound by existing law, which means that additional licences can still be granted.

“Gambling operators are legally entitled to receive a licence, as long as the relevant criteria are fulfilled,” he said. “It also means that any licences that have already been granted [at last report there are seven] remain valid for the specified period.”

That licence duration period is six years. There are reportedly around 30 licence applications still in the pipeline, creating a potentially significant commercial legal problem for S-H if it does finally repeal its current gambling law.

Opposition politicians have already warned the government to expect litigation from impacted companies if the repeal measure goes through, and there is still strong opposition to re-joining the German Treaty from some parties, which have pointed out that the European Commission has reservations on the restrictions it imposes.

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