Q & A: Michael Winkelmüller

The eyes of all international sports betting operators will focus today on Karlsruhe, Germany, where the First Senate of the Federal Constitutional Court will hold a hearing that could change the odd-set sports betting monopoly in Europe completely.

The much highly legal "event" has been preview by journalists, lawyers and legal analysts as if it was the final of World Cup Soccer.

For an inside perspective, IGN talked with Dr. Michael Winkelmüller of the law firm Redeker Sellner Dahs & Widmaier, which represents the plaintiff in this high profile case.

IGN: What is this all about?

Michael Winkelmüller: The plaintiff, Irene Katzinger-Göth, desires a gambling license for sport bets that is not only restricted to horse races. She took action against the free state of Bavaria in 1998. The administrative court of Munich, appellation court of Bavaria and the federal administrative court dismissed the action. And she brought the complaint to the Bundesverfassungsgericht (Federal Constitutional Court) in 2001.

The official reason for the state monopoly is contradictory, as the German state allows private betting on horse races but not on other sports events that are reserved to state run companies.

IGN: What are the main causes?

MW: The main cause of action is that the German gambling monopoly is not in accordance with professional liberty as granted by the German federal constitution (Art. 12 Par. 1). The official reason for the monopoly is that only the state can run gambling companies, as only the state is able to fight dangers of gambling dependency. The real reasons for the state monopoly are treasury ones. The German state-run lotto and gambling companies (Lotto-Toto-Block and Oddset) do little or nothing to prevent betting.

Contrarily, a dense net of betting agencies (over 26,000 in Germany), record sums spent on advertising (much more than other companies in consumer product sections) and a wide variety of bets show that the state wants to gain money with betting. As this shows, legal restrictions do not reflect a concern to bring about a diminution of gambling opportunities, and the financing of social activities do not constitute only an incidental beneficial consequence, but the real justification for the restrictive policy adopted. This policy is, thus, not in accordance with professional liberty as granted by the German federal constitution.

IGN: Who will be heard in presence of the eight judges, forming the No. 1 senate (of two senates) of the Bundesverfassungsgericht (German Federal Constitutional Court)?

MW: This will be:

Mrs. Katzinger-Göth (plaintive), represented by Rechtsanwälten Dr. Ronald Reichert and Gernot Lehr, Redeker Sellner Dahs & Widmaier;
Bookmakers associations:
- a) Deutscher Buchmacherverband (DBV, German Bookmakers Association), represented by president Dr. Norman Albers and Prof. Dr. Kühne;
- b) VEWU (Verband der Europäischer Wettunternehmer, Association of European Betting Entrepreneurs), represented by president Markus Maul and Prof. Dr. Kühne; and
- c) IFeB (Interessengemeinschaft Freier Europäischer Buchmacher, Association of the Interest Group of Independent European Bookmakers), represented by of executive board member [Vorstand] Dieter Pawlik, Prof. Dr. Kurt Schelter and Prof. Dr. Kühne;
Staatsregierung des Freistaats Bayern (government of the free state of Bavaria, the German Bundesland where the bureau of plaintive (Munich) is located), represented by Prof. Dr. Lerche and Prof. Dr. Dietlein;
The government of Federal Republic of Germany, represented by Prof. Dr. Böse;
associations for dependency matters:
- a) DHS, Deutsche Hauptstelle für Suchtfragen (German Head Office for Dependency Matters);
- b) fags, Fachverband Glücksspielsucht (association on matters of gambling dependency); and
sports Associations:

IGN: Are you allowed to question them?

MW: Yes, we are allowed to question them. The procedure will follow a 245-minute timetable set by the Bundesverfassungsgericht (Federal Constitutional Court). The time schedule is:

0. Formalia -15 mins.
1. General statements - 20 mins.
2. Sports betting and professional liberty (Art. 12 Constitution of FRG) - 50 mins.
3. Principle of Proportionality - 120 mins.
3.1 Fighting of gambling dependency/practice of stat- run gambling companies.
3.2 Consumer protection.
3.3 Financing of public welfare.
4. Characteristics of betting mediation agencies - 40 mins.

IGN: Besides Dr. Ronald Reichert and Prof. Dr. Konrad Redeker, who will be present from your law firm?

MW: Gernot Lehr. Prof. Dr. Konrad Redeker will not be present.

IGN: Will there be a conclusion? MW: Pleading will take place in accordance with the timetable set by the Bundesverfassungsgericht .

IGN: When will the court case be heard? Will there be a verdict?

MW: It's diifficult to say when; not tomorrow, probably not in weeks, but in months. Many operators, worldwide, are following the legal developments closely in Germany. And of course they have a desirable eye on the huge German market with 82.5 million inhabitants.

The Market

A recent MECN report, "The German Betting Market in Transition," portrays the German gambling market as follows:

Betting and gambling turnover in the German market amounts to ca. euro 30 billion annually. That is, on average per capita amount to ca. euro 380 annually. Based on the required payout ratios set by the gambling laws, per capita gambling "losses" thus amount to an estimated average of ca. euro 110 annually.
The betting sector currently makes up 5% -10% of the total gambling market.
The odd-set turnover in 2004 was euro 574 million and the Lotto, which just turned 50, had a turnover of 30 billion euros in the same year.