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German Gaming Law updated No. 12 |
Newsletter on Betting and Gambling Law
Nr.14 of September 2nd 2004
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Summary:
1. Editorial
2. Administrative Court of Kassel: Licensing Regulations for Sports Betting are unconstitutional
3. County Court of Heidenheim: Art. 284 StGB is not applicable to cross border sports betting offers.
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1. Editorial
Dear Readers,
Many decisions on cross-border sports betting offers show the German judges’ alarming ignorance of Community Law, although it is directly applicable.
Even the Federal Court of Justice in its “Nicer-Betting-Decision” (on which we already reported) held the state licensing provision to be illegal, but on the other hand found the accessory provision of Art. 284 German Penal Code (Illegal Operation of Gambling) “as such” to still be in conformity with Community Law.
Such an isolated view is of course improper from a Community-Law (established jurisdiction) point of view. Considering the principle of uniformity of law, one cannot hold an administrative provision to be illegal, while at the same time affirming criminal liability on the basis of the accessory provision of Art. 284 German Criminal Code, or even another accessory competitive law provision.
The County Court of Heidenheim worked out a decision on this point very well that we are going to report on subsequently.
The decision of the Administrative Court of Kassel declaring state licensing provisions to be unconstitutional reaches even further towards liberalisation than the Hessian Administrative Court of Appeal’s decision we reported on. The Federal Constitutional Court will soon have to decide on this question, since other courts will probably not sweep over the articulated considerations.
The situation remains exciting.
The editors
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2. Administrative Court of Kassel : State Licensing Provision on Gambling is unconstitutional - by Martin Arendts, M.B.L.-HSG, Attorney-at-Law
The Administrative Court of Kassel has recently declared the state licensing provisions on gambling to be unconstitutional (decision of June 24th 2004, case-no. 2 G 701/04).
According to the Administrative Court of Kassel, a state law provision according to which the state has the exclusive right to operate sports betting is not compatible with constitutional law, even if the freedom to provide services and the freedom of establishment (art. 43 and 49 EC-Treaty respectively) were not touched. In fact the provision is to be regarded as unconstitutional because of its violating Art. 12 I of the German Constitution (Freedom to choose one’s profession).
In the case decided Community Law was not applicable since the bookmaker's establishment was on the Isle of Man (and therefore outside the European Economic Area). The court of the major proceedings ruling on the preliminary decision of the Hessian Administrative Court of Appeal (we already reported), reasons as follows:
“The fact that the defendant as a procurer of sports bets therefore cannot invoke the freedom of establishment and the freedom to provide services granted by Community Law since he procures the sports bets of an operator not established in the area of application of the freedom of establishment and the freedom to provide services, does not have any impact on the Hessian Administrative Court of Appeal’s assumption that the provision of Art. 1 paragraph 1 SpW/LottoG (law on sports bets and lotteries) which exclusively entitle the state of Hessia to operate sports bets is not compatible with prevailing law and therefore in connection with Art. 284 StGB and Art. 11 HSOG does not constitute a legal basis for the contested notice. Since, in the opinion of the court, the same reasons that lead the Hessian Administrative Court of Appeal to assume a violation of Art. 1 paragraph 1 SpW/LottoG against Community Law, also lead to the assumption that Art 1 paragraph 1 is in violation of the freedom to choose one’s profession granted by Art. 12 German Constitution. (…).
The situation is not any different regarding the freedom to choose one’s profession in terms of Art. 12 paragraph 1 GG (German Constitution). In this case, limiting the freedom to choose one’s profession can be justified by outstandingly important public policy. Nonetheless, according to the jurisdiction of the Federal Administrative Court, such justification fails when undesirable gambling as called for by Art. 284 StGB, is in contradiction with the state’s operators’ behaviour, by extremely expanding gambling offers with aggressive advertisement (Federal Administrative Court, decision of March 28th 2001 – 6 C 2.01, BVerfGE 114, 92).
In in this case, one reaches the conclusion – as the Hessian Administrative Court of Appeal did in its decision of February 9th 2004 - that the operation and advertisement for Oddset-bets in Hessia has reached an extent which leads to the justification for limiting rights granted by the EC-Treaty by installing a state monopoly and its protection by penal law to become inapplicable, the same must be true for justifying the limitation of the freedom to choose one’s profession as granted in Art.12 paragraph 1 GG.”
The only reason, the Administrative Court did not bring the case before the Federal Constitutional Court in accordance with Art. 100 paragraph 1 GG, is that the case was considered to be a matter of preliminary legal protection. The courts charged with the main proceedings in contrast will – in our opinion – have to examine the constitutional objections and bring those relevant questions before the Federal Constitutional Court.
The days of the states’ gambling monopoly are therefore numbered, not only from a Community Law point of view, but also from a Constitutional Law point of view.
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3. County Court of Heidenheim: Art. 284 StGB is not applicable to cross-boarder sports betting offers – commented on by Martin Arendts, M.B.L.-HSG, Attorney-at-Law
The Administrative Court of Heidenheim has recently ruled on the cross-border offering of sports bets in a penal case and dealt with the facts and the legal position extensively (decision of August 19th 2004, case-no. 3 Ds 42 Js 5187/03). The Administrative Court emphatically denies culpability in terms of Art. 284 StGB. The court explains:
“Art. 284 StGB as the only criminal offence in question is not applicable in this case, since applying it would constitute a disproportional interference with the freedom of establishment and the freedom to provide services of the C. GmbH (and the accused co-operating with the C. GmbH that are both ensured by the EC-Treaty).”
In the following text the court points to the restriction of the basic freedoms not being justified given the “extreme increase of the gaming offer” as well as to the “massive advertisement” for the state gambling offer. After debating the legislation materials- and goals the court reaches the following conclusion:
“The court assumes that monopolising sports bets with fixed odds by the legislator of Baden-Württemberg is predominantly not due to reasons of public safety, but at least to the same degree, motivated by fiscal interests. Furthermore, that the problem of interferences with the right to provide services and the right of establishment as well as the right to choose one’s profession were not even rudimentarily expounded, as equally so little as the question on how to formulate these interferences with consideration without falling short of reaching the credible goal of limiting the dangers associated with gambling. It is not the function of jurisdiction to ex post undertake discretionary and prognostic decisions instead of the legislator.”
In view of the unity of the legal system the court appropriately refuses to regard Art. 284 StGB “as such” that is isolated from the state’s provision.
“Holding the state monopoly in Baden-Württemberg to be incompatible with Community Law, and at the same time excluding the question of culpability in terms of Art. 284 StGB, is not permissible. Rather state- and federal legislation has to be regarded as a unity. In the case that one would only consider the state provision to be incompatible with Community Law, and at the same time continue to apply Art. 284 StGB, this would mean referring the citizens to sue for a license without basis in common law in a tedious administrative lawsuit with uncertain success, meanwhile forcing them to renounce to their rights until the end of the lawsuit. From the point of view of freedom and rule of law, such an approach is inappropriate; since it would allow to the state legislator to rest on the current provisions of the law on sports betting, and would evidently be contrary to the ECJ’s request. From a Community Law point of view, federal law, state law, penal law and police law have to be regarded as a unity. At the same time the interaction of these laws leads to a consistent interference with citizens’ rights.
This decision almost does not need any further explanation. From our point of view there is not any doubt that the European Court of Justice sees the problem in the same way. The Federal Court of Justice’s defence line, upholding Art. 284 StGB “as such” is not tenable.
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© 2004; Publishing is desired with publication of the source including contact information.
A copy or publication information is desired. |
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