REUTERS Fri Mar 23, 2007 12:54 PM BST20 By Huw Jones
BRUSSELS, March 23 (Reuters) – German regions have been told by the European Commission to rethink plans to ban online gambling or face possible legal action, an official at the EU’s executive arm said on Friday.
It is the latest clash between Brussels and European Union countries over the betting industry, which is restricted to state-owned monopolies in some EU member countries.
EU Industry Commissioner Guenter Verheugen wrote to German regional state governments on Friday, giving them a month to change a draft treaty on the issue, the EU official said, confirming an earlier Reuters story.
“We asked Germany to reconsider the total ban on lottery and sports betting on the Internet. We think a proposed total ban is disproportionate and there are less restrictive measures, such as mandatory prior registration and strict guarantees on identification,” the Commission official said.
Britain and Austria, two countries with online gaming industries, have challenged the ban.
Shares in Austrian online betting firm bwin (BWIN.VI: Quote, Profile , Research) erased sharp losses after the news Brussels would challenge the ban. Germany is the biggest market for bwin.
A draft over Germany’s gambling rules, which is still being considered by German authorities has Betfair Group Plc, a British online gambling site, already calling foul. According to Betfair, the draft will force it to pay over 16% on all stakes and it will also restrict licenses for private betting companies to seven. According to Betfair these new rules would be “discriminatory and protectionist.”
Betfair complained to the European Union this week over this draft proposal.
Today the EU (European Commission) started legal action against Sweden and Germany to try to ensure that they comply with the European Union’s free movement of services.
Charlie McCreevy, the EU’s Internal Market Commissioner has given Sweden two months to show that the prohibitive measures against poker games and tournaments are compatible with EU law.
Germany and the Online Gambling Ban
The UIGEA (Unlawful Internet Gambling Act) was passed in 2006. Since then Germany has followed by having signed an agreement, starting Jan.1st this year to ban web based gambling.
Websites with casinos, and or poker rooms and sports betting has been blocked by financial institutions. This will prevent all transactions to or from gambling sites, in Germany. But they are allowing land based casinos to operate, because they think land based can be controlled.