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RGA disappointed by German law proposals

28 October 2011

(PRESS RELEASE) -- Still no market-based and consistent regulation for the State Treaty on Gambling in sight. RGA disappointed by German gambling law proposals. EU-wide legally secure solution only offered in Schleswig-Holstein.

The Remote Gambling Association (RGA), the largest trade association for remote gambling operators in the world, has expressed its deep disappointment at the continuing absence of a properly regulated and competitive German gambling market for private remote gambling operators and consumers. This follows a statement today by the Minister Presidents of the German Lander urging the adoption of a State Treaty which does little to regulate remote gambling.

In particular, questions remain about the intention of the Lander, by July 2012, to introduce a system that: limits operator licence numbers; would see the adoption of a wholly uncompetitive turnover tax regime; and an outright prohibition of casino and poker online games. This is out of line with the more measured and rational approach taken in other Member States, such as Denmark and Spain, who are soon to introduce systems that regulate nearly all forms of remote gambling and which are based on a much more viable gross profits taxation model.

“There appears to be no connection between the desire to provide German citizens with a regulated market and the actual text of the State Treaty. The Minister Presidents say on one hand that they want to encourage sports betting with regulated German operators, but at the same time deny this to citizens who wish to partake of casino and poker games online,” stated Clive Hawkswood, Chief Executive of the Remote Gambling Association (RGA).

“It is clear that this will have little effect in reducing the large number of German citizens gambling with operators licensed in other jurisdictions and which offer casino and poker products. Policies to restrict consumers from accessing such sites have consistently been shown to be ineffective. As such, this policy will have limited practical impact,” Mr Hawkswood commented.

The current draft State Treaty calls for a limit of 20 licences and a turnover tax of 5%, a taxation basis that has failed in Member States like France, severe limits on betting amounts (for example, there is a suggested limit of 1,000 euros per month), a prohibition on casino and poker games, and a prohibition on live betting.

In contrast, the German Land of Schleswig-Holstein passed its own online gambling law earlier this year, which regulates all gambling products on a gross profits basis, following the continuing difficulties with the German states reaching agreement. This law has already been approved by the EU through the normal notification process.

“The European Commission has repeatedly stated that the draft State Treaty falls foul of EU law and the latest version appears to make little headway in meeting the Commission’s concerns. In fact, such an approach simply makes the Schleswig-Holstein proposal more attractive and creates a fragmented, confusing and undesirable situation for German consumers,” stated Mr. Hawkswood.

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