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German Gaming Treaty Slammed by EU

European Union regulators are not impressed with the details of Germany’s new gambling treaty. The European Commission (EC) made its case in a letter to German officials that went out this week.

EC Not Impressed

In particular, EC regulators were not impressed with Germany’s justifications for banning online table games including poker. In the letter they state flatly that German officials simply didn’t provide enough evidence for their claims that these games are magnets for fraud, addiction and organized crime.

Germany’s gaming treaty limits the number of gaming licenses to 20, while a five percent tax on any bet. Gaming companies claim that Germany is simply trying to protect the state gaming monopoly rather than prevent fraud.

But it wasn’t all bad news in the letter. The EC was impressed with changes to betting limits and the number of licenses issued. These changes, according the Commission, could allow for more profitable gaming operations.

Schleswig-Holstein Situation

The EC’s letter was only aimed at the 14 German lander that signed on to the treaty. Schleswig-Holstein (SH), Germany’s northernmost lander, does not recognize the treaty and has instituted it’s own, more casino-friendly, rules. In particular, their tax is based on revenue, rather than bets. The SH treaty passed by only one vote, but has been praised for being more in line with the open nature of the European Union.

Critics of the SH treaty slammed it for being too easy going and suggest that the state could become “Germany’s Las Vegas.” There’s actually some truth to that statement because German citizens would be able to access SH-licensed sites.

The Next Step

This week’s letter from the EC to the German government is something of a warning shot that should be heeded. Should Germany fully implement the law, the EU has the power impose and infringement hearing and order the necessary changes.

German officials who think that they’ll be able to hold out should discuss the matter with their counterparts in Portugal, France and Spain. Euro governments are finding that their long held gaming monopolies are slowly crumbling in the face of open economic markets.