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Gambling Compliance report world regulatory briefing germany april 12 2012

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World Regulatory Briefing Germany: Conference Report
20 Apr, 2012 __ Rita Gyaraki, GamblingCompliance. Text on http://wrbriefing.com/sites/default/files/ReportWorldRegulatoryBriefingGermany.pdf

programme on http://www.wrbriefing.com/program

Ahead of fast approaching deadlines, the dynamic and ambiguous state of the German regulatory environment was discussed by regulators and industry representatives on April 12 at Clarion Events' World Regulatory Briefing in Frankfurt.

The conference, which ran under the title “German roadmap to regulation — the first-ever, all-inclusive focus on 16 German states’ plans for igaming,” was attended by around 160 industry representatives.

With the European Commission’s answer to the Interstate Treaty revealed just a few weeks ago and such important deadlines approaching as the May 6 elections in Schleswig-Holstein and July 1, 2012 set for the ratification of the Interstate Treaty, the conference was perfectly timed among/before fast paced developments.

The questions everyone was asking were whether the Interstate Treaty will come into force or if it will still be stalled in state parliaments and whether Schleswig-Holstein will join the Interstate Treaty at the last minute.

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Gambling Compliance report world regulatory briefing germany april 12 2012

  1. 1. World Regulatory Briefing Germany:Conference Report20 Apr, 2012Rita Gyaraki, GamblingComplianceAhead of fast approaching deadlines, the dynamic and ambiguous state of the Germanregulatory environment was discussed by regulators and industry representatives last week atClarion Events World Regulatory Briefing in Frankfurt. Rita Gyaraki fromGamblingCompliance gives her take on the event.GamblingCompliance attended the World Regulatory Briefing in Frankfurt, Germany, onApril 12, 2012. The conference, which ran under the title “German roadmap to regulation —the first-ever, all-inclusive focus on 16 German states’ plans for igaming,” was attended byaround 160 industry representatives. With the European Commission’s answer to theInterstate Treaty revealed just a few weeks ago and such important deadlines approaching asthe May 6 elections in Schleswig-Holstein and July 1, 2012 set for the ratification of theInterstate Treaty, the conference was perfectly timed among/before fast paceddevelopments.The questions everyone was asking were whether the Interstate Treaty will come into force orif it will still be stalled in state parliaments and whether Schleswig-Holstein will join theInterstate Treaty at the last minute.Martin Stadelmaier, the head of the chancellery of Rhineland-Palatinate and a leadingcoordinator of the new Interstate Treaty on Gambling, seemed to be confident that, after theelections, Schleswig-Holstein will join the Interstate Treaty. He was also confident that thetreaty will be ratified in 13 out of 15 state parliaments by the end of June 2012, despite thefact that two states, North Rhine-Westphalia and Saarland, will be unable to ratify it by theset date due to upcoming elections.The European Commission, in its answer to the German states, noted that currently it doesnot have enough information to decide on the compliance of the treaty with EU law;therefore, it welcomes the readiness of the German states to prepare an evaluation of thetreaty and present it to the commission. As Stadelmaier noted at the conference, there will bea full and thorough evaluation of the treaty prepared, the results of which will be presented infive years. The evaluation process will start as soon as possible and will be conducted at morestages focused specifically on the areas which the commission has pointed out.Present at the conference was Guido Schlütz, senior official responsible for gambling inSchleswig-Holstein’s Ministry of Interior. He revealed that as of the beginning of April 2012the ministry had received 22 applications for betting, including applications for exclusiveonline betting and applications for the combination of online and terrestrial betting. Schlützalso revealed that currently the ministry has a two-digit number of applications for onlinecasinos as well. As the state official confirmed to GamblingCompliance, the privatisationproject of the state’s six casinos, which are the only operators which will be entitled to offer
  2. 2. banked games online, was stopped due to the lack of interest, namely the lack of bids, whichdid not reach the government’s expectations.Allegations were addressed to Schlütz that Schleswig-Holstein is delaying the licensingprocess on purpose, to enable the state to give up its own Gambling Act and join theInterstate Treaty without having to pay expensive compensation to already existingSchleswig-Holstein licensees. Schlütz countered these allegations, stating that: “I have got alaw, I will execute it until that law is in force.” Although the gambling industry is looking atthe date of the election as the date by which at least some licences will have to be in place inorder to secure the fate of Schleswig-Holstein’s Gambling Act, Schlütz did not seem toconsider the May 6 deadline as momentous. In his opinion, even if the new government isagainst the current Gambling Act, an eventual withdrawal act would take untilOctober/November 2012 to pass the parliament.In response to the question as to whether the first Schleswig-Holstein licences will be issuedby the end of this month, Schlütz said that this is a question which depends on the quality ofapplications as well. He commented:“We get applications on a daily basis. To put it nicely, the quality varies a lot. The slimmestapplication form we got was a postcard, but we also got a storage box full of nine or ten ring-binders from one applicant.”He referred to the currently incomplete and low number of staff as a reason behind thecurrent delay.Christian von Boetticher, MP of the ruling Christian Democrats in Schleswig-Holstein, saidthat he is confident that the first Schleswig-Holstein licences will be issued by the end ofApril 2012.Representatives of the gambling industry were all of the opinion that under the treaty in itscurrent form it will be really hard to create an attractive games offering and it will fail tochannel players towards legal sites.As William Hill Head of International Wilhelm Huber noted:“We do not really see a profitable business model behind it and it is very hard to operate insuch a market.“The same product we offer in the UK would not make any profit in Germany, if we want tocomply with the requirements of the 15 states Interstate Treaty, we will need to offer acompletely different product in Germany than what we currently do internationally.Therefore, the customer will have a worse product at a worse price.According to Dr. Peter Reinhardt, head of Central Europe at Betfair, “to cut off poker andonline casino means to cut off nearly 60 percent of the total market, so immediately we createa black market of 60 percent”.Betfair confirmed that it is among the applicants for a Schleswig-Holstein licence. WilliamHill and Sportingbet also stated that they are interested in it and currently they are finalisingtheir submissions. In reply to the question as to whether they will operate throughout
  3. 3. Germany in possession of their Schleswig-Holstein licence, Dr. Peter Reinhardt from Betfairnoted:“How we deal with customers in other states, this we will have to see. This is a legal questionmore than a business decision.”The uncertainty around the Schleswig-Holstein act did not seem to deter operators. AsReinhardt noted, they “rely on the existing law, which was passed in the parliament”.However, general opinion was that the legal turmoil was a long way off coming to an end.Ian Ince, Sportingbet’s head of regulatory affairs, said he has “a feeling this is going to dragand drag and drag”.Ahead of parliamentary elections, Schleswig-Holstein’s state parliament will vote on theopposition’s second “seek and destroy” act between April 25 and 27, 2012.

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