SOURCE: Gaming Intelligence Group

In its second statement of position, the European Commission has strongly criticised all key aspects of the draft State Treaty on gaming proposed by the Federal German states. The Commission has voiced serious reservations as to the treaty's compatibility with European Community law.

The Commission had initially investigated the ban on holding and arranging sports bets and lotteries over the internet in its first detailed statement of position in March 2007, describing the proposal as disproportionate. The EU Commissioners discuss further aspects of the draft treaty in greater detail in this, their latest opinion.

In particular the Commission has highlighted key provisions of the scheduled State Treaty as being disproportionate and incompatible with the EC Treaty. These include restrictions on the free movement of capital, advertising restrictions, limitation on sales outlets and restriction of sales channels as well as other restraints of competition.

The EU Commission has now given the German authorities two months to reply to the individual points with which it found issue. If the EU Commission is not satisfied with the reply, it will probably extend the infringement proceedings already in progress to include the new State Treaty on gaming.

"The EU has recognised that certain federal states are trying to exploit their legislative power in the face of super ordinate law, not – as is erroneously and repeatedly claimed – to protect people against gambling addiction, but to eliminate the competition and corner the economic advantages of monopolising the market. They won't succeed," said Rainer Jacken, Management Board spokesman of FLUXX AG, the German lottery specialist and online bookmaker.

"We await with interest to see how those responsible will now react to this second, more outspoken warning from Brussels. To plead ignorance, as they did in their reply to the EU Commission's first statement of position, will obviously now be completely out of the question. Because the EU Commission's renewed directive to subject the draft State Treaty to a thorough review could not have been clearer. We appeal to all Prime Ministers finally to take control of the issue and not be ordered about by their own officials and directors of lotteries."