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German Gaming Law updated No. 28 |
Newsletter on Betting and Gambling Law
No. 28 of the 27th of March 2006
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Content:
1. Sports-Betting and Gambling 2006 – a provisional Appraisal
2. The Freedom to provide Services according to EEA-law: EFTA Supervisory Authority brings Action against Norway
3. Trade Mark “Lotto” cancelled for good. When is “TOTO” going to follow?
4. Euroforum-Conference “Sports-Betting – a new Market forms up”
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1. Sports-Betting and Gambling 2006 – a provisional Appraisal
The first quarter of the year 2006 has not passed yet, but in view of tomorrow’s pronouncement of the long awaited fundamental judgement by the German Federal Constitutional Court, it is clear that this is the year of decisions.
The Federal Constitutional Court’s decision will certainly result in some kind of liberalisation, though the question of its extent remains open. How is the Federal Constitutional Court going to balance its reasoning, taking into account the freedom to choose one’s profession as well as police law (youth protection, the protection from gambling addiction etc.). We will be able to give you a first appraisal after the judgement’s pronouncement tomorrow.
Several Community Law related questions will have to be resolved in the near future. The European Parliament’s decision to exempt gambling from the Services Directive represents a political compromise and does not signify, that the freedom to provide services and the Gambelli Criteria do not apply to gambling anymore. Germany and other Member States sealing off their markets are facing Infringement proceedings. In the court trails fallowing these proceedings, the ECJ is not limited to the questions referred to by the national courts, but can comprehensively comment on the whole issue (i.a. on competition law). Astonishingly, the EFTA has already passed this stage. Its Supervisory Authority has already brought action against Norway for having introduced a national monopoly on gambling machines (see the following report).
Several Italian follow-up cases to Gambelli (i.e. Planica case-no. C-338/04) have been pending before the European Court of Justice since 2004, after an increasingly inconsistent jurisdiction on this subject had emerged in Italy. The ECJ may use these cases, in order to further clarify the Gambelli Criteria as they have been grossly disregarded by some national courts.
Another thrilling question is the role Competition Law will play for the gabling- and betting market. The Federal Court of Justice (BGH), in its Faber decision had held, that the cartelising of providers in the Deutscher Lotto- und Toto-Block was not unproblematic in the view of competition law. The German Cartel Authority recently pointed out, that the remaining competition had to be protected. The Deutsche Lotto- und Toto-Block will not be able to continue its market allocation and market foreclosure strategy. It must not dictate the conditions to distribution.
Fortunately not only the courts, but the investors too may eventually come to a decision. Numerous Betting- and Gambling Operators strive to the stock market. Things remain exciting.
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2. The Freedom to provide Services according to EEA-law: EFTA Supervisory Authority brings Action against Norway
- by Martin Arendts, M.B.L-HSG
The Gambelli decision unfolds its effect outside the EU as well, as we had already mentioned in no. 17 of our Newsletter “German Gaming Law updated”. Parallel to the provisions of the EC-Treaty, the freedom to provide services and the freedom of establishment are part of the treaty on the European Economic Area (EEA) concluded between the EU-Member States and the EFTA-States.
The EFTA Supervisory Authority the equivalent of the EU-Commission, brought action against Norway on March 13th 2006, after the Norwegian government had failed to comply with a comprehensively argued decision by the Supervisory Authority. Meanwhile the writ was served by the EFTA-Court (case-no. E-1/06). Norway was called upon to reply until the 18th of April 2006.
The reason for the action is the introduction of a national monopoly on gaming machines. Norway amended its gambling law in 2003. Accordingly the state-owned Norsk Tipping has the exclusive right to operate about 10.000 gambling machines. Thereupon the EFTA Supervisory Authority initiated the infringement procedure. The Norwegian provision was called inconsistent and disproportional. It were especially incompatible with the consistency test established by the ECJ.
The EFTA Supervisory Authority was thus faster than the European Commission, which initiated infringement proceedings against Denmark and Greece but has not yet brought action. Insofar the supervisory authority’s decision is groundbreaking. The rarely called upon EFTA-Court is probably going to decide soon.
It is of special interest, whether the court is going to follow the Supervisory Authority’s line of arguments, arguing that the Gambelli-criteria were not only applicable to sports-betting but also to other games of chance. A liberalisation of the Scandinavian gaming market (as well as the EEA-member Lichtenstein) now seems possible.
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3. Trade Mark “Lotto” cancelled for good. When is “TOTO” going to follow?
As we had already mentioned, the Federal Patent Court has approved the cancellation of the trade mark “LOTTO” for games of chance. The “Deutsche Lotto- und Toto-Block”, the cartel of state providers had now filed complaint with the Federal Court of Justice (BGH). The Federal Court of Justice – as last instance court - recently approved its cancellation (decision of the 19th of January 2006, case-no. 1 ZB 11/04). “LOTTO” had to be regarded as a descriptive indication of an object. It could not be regarded as a reference to its operational origin. Regarding the designation of a product such as “LOTTO” this could only be the case, if the predominant part of commerce regarded it as a reference to a particular operator. A state monopoly such as it exists in Germany did not change its meaning into a reference of origin.
The same criteria apply to the trade mark “TOTO” held by the “Deutsche Lotto- und Toto-Block” as well, which is only a matter of describing an object , in the case, the abbreviation of Totalisator. Pleading this mark, a state lottery operator tried to have the use of “TOTO” prohibited and claimed damages. Thereupon ARENDTS ANWÄLTE filed for cancellation of the mark. The German Patent and Marks Office will decide upon this claim within the next few weeks. It can be assumed that the mark “TOTO”, in accordance with the Federal Court of Justices’ decision will be cancelled as well.
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4. Euroforum-conference “Sports-Betting – a new market forms up”
On the 29th and the 30th of Mai 2006 the most comprehending event regarding the sports-betting market will take place in Germany. The Federal Constitutional Court’s decision and its impact will play a vital role. Attorney-at-law Martin Arendts from ARENDTS ANWÄLTE law office specialised in Gaming Law will give a lecture and is at your disposal for any questions.
The event will be arranged by the renown organiser Euroforum in cooperation with the German sports publishing house. Further information is available under www.euroforum.de/p1100605. |
