New Obstacle Emerges in Germany's Sports Betting Licensing Procedure

After an Austrian bookmaker filed a judicial challenge, claiming that the ongoing sports betting licensing process was hampered by a lack of openness, Germany's efforts to restructure its online gambling industry suffered another setback.

In accordance with the Third State Treaty on Gambling, Germany began enforcing an experimental sports betting regulatory framework on January 1, 2020. A permanent framework is anticipated to go into effect on June 30, 2021, following the expiration of the new regime.

The recently put into effect regulations made it possible for interested online sports betting businesses to submit applications and work in a regulated environment.
But earlier this week, the Administrative Court of Darmstadt upheld a complaint made by the Austrian betting company Vierklee that the application process for gambling licenses was unfair and insufficiently transparent. The procedure shall be put on hold until further notice, the court decided.

The commencement of the concession procedure in July 2019 was not disclosed to Vierklee or other sports betting operators, according to the company's legal representative, who spoke to the German media outlet Bild.

The Darmstadt Regional Council and the Hesse Ministry of Interior were entrusted with accepting and analyzing sports betting license applications and awarding licenses to the accepted applicants in accordance with the Third State Treaty on Gambling.

The eight-year German endeavor to regulate online sports betting, however, has been in turmoil as a result of the most recent court decision.

The German Sports Betting Association describes the court ruling as a major setback for its members.

The recent decision was a major setback for the German Sports Betting Association's (Deutsche Sportwettenverband, DSWV) members, according to Mathias Dahms, the organization's president. "Even though the legislator promised concessions back in 2012, an early approval, which should have been made possible by the State Treaty on Gambling, which has been in effect since the beginning of the year, is now once again in the stars," he added.

Neither Vierklee nor the German Sports Betting Association are members.

Mr. Dahms claims that the current predicament might have been averted and that sports betting firms with customers in Germany have once more been denied access to "a regulated market and consequently legal certainty."

Additionally, Mr. Dahms expressed sympathy for "the staff at the Darmstadt Regional Council and the Hessian Ministry of the Interior, who have been tremendously dedicated in the past few months to finally make the approval process a success."

The DSWV is debating whether to take Vierklee's lawsuit to court on appeal.

In addition to sports betting, the leaders of Germany's 16 states decided last month to allow online casino games and online poker as part of the country's restructuring of its gambling industry. Licenses for online gambling and poker, however, won't be made available until July 1, 2021, when the permanent framework is scheduled to go into effect.