European Commission Uncertain on Sports Betting Growth in Germany

Aug 27

The European Commission expressed its apprehension regarding Germany’s plans to expand its sports betting market. These concerns were conveyed through a “blue letter” which discussed the country’s implementation of a new system for issuing sports betting licenses starting on January 1, 2020.

The letter outlines the Commission’s view that the German authorities’ aim to reduce the scope of the black market through the liberalization of sports betting will not prove fruitful.

Back in March, 16 states in Germany gave the green light to a stopgap treaty. The agreement extends the existing provisional allowance for sports betting operators to operate their platforms. Companies can apply for a license extension in January 2020, which would let them continue their operations up until June 30, 2021.

At this point, the states want to have a more stable treaty in place for the gambling sector. While there is a plan to produce a three-year extension for such licenses, the commission does not believe that the 18-month period is enough time to allow most unauthorized operators to apply for a license.

The European Commission also believes that a short-term treaty could function as an incentive for unauthorized gambling operators to continue their operations in an identical fashion. This includes operating online casinos, which are not legal in the stopgap treaty. Online casinos might not be part of a more permanent treaty.

The European Commission makes use of a “blue letter” as an initial method of informing a government that it believes the party in question is trying to enforce flawed legislation. If the warning is disregarded, there is scope for the commission to go ahead with official infringement measures.

This is actually not the first time that the commission has gone down this route before when it comes to dealing with the German gambling sector. The commission did not give the green light of the second state treaty in Germany having a fixed amount of licenses available for operators. While the German authorities did try to make modifications to gain the support of the commission, those attempts proved to be unsuccessful.

Despite the doubts expressed by the European Commission, the regulators in Germany are paying it no mind.

According to a spokesperson from the State Chancellery of North Rhine-Westphalia, the commission’s view “does not contain any points that could give cause for change in the specific content” of the country’s impermanent treaty.