European Court of Justice to Rule on German Gambling Laws

On September 8, the European Court of Justice will decide whether or not German gambling laws are in violation of European trade treaties. Right now, the laws maintain a state monopoly on all sports betting in the country. If the EJC decides to break up this sports betting monopoly, the nation’s internet betting industry would be opened up to outside competitors – a move which could see German football clubs earning hundreds of millions of euros in online gambling sponsorship agreements, which are currently banned.

The nation’s sports gambling market, including both high street bookies and online sportsbooks in Germany, is worth an estimated 7.8 billion euros. Half of this money, however, is bet at unlicensed internet sportsbooks. By overturning Germany’s sports betting monopoly and replacing it with a licensing and regulation scheme, much of this money could be kept within the German economy, and gambling taxes could be used to further support German teams.

“The extra money would certainly strengthen German clubs’ position in the transfer market,” said Rainer Mutschler, chief executive officer of VfB Stuttgart Marketing GmbH. “Most German clubs are not run to make a profit, but rather to reinvest money in the playing squad.”

“The current state monopoly on sports gambling is fundamentally flawed,” Mutschler continued. “A controlled, licensed sports betting market should be introduced.”

However the EJC rules next week, it is probable that internet betting in Germany will open up in the near future. The current inter-state gambling treaty is set to expire in 2011, so even if the court chooses not to overturn Germany’s sports betting monopoly, the industry will very likely be liberalized once the current treaty ends.