What's next for German sports betting?
Interim suspension of German licences was no surprise, but has left many operators playing a guessing game
Yesterday’s news that the sports betting licensing process in Germany had been suspended amid legal challenges by disgruntled operators was a bitter blow those the Hessian Ministry of the Interior had deemed worthy of approval just weeks earlier.
The German online gambling saga has taken another twist, and yet again the industry has been left guessing what might follow.
Despite 20 firms being awarded provisional sports betting licences earlier this month, there was an element of inevitability surrounding the latest delay.
At least 12 challenges to the outcome were received at Wiesbaden “ the court designated to hear cases from international operators “ with more issued at other administrative courts in Berlin and Hamburg. The likes of bet365, Bet Victor, Betclic and Tipico were among those questioning why they were not among the 20 names approved.
New hurdles
The first hurdle for unsuccessful applicants to overcome will be the expected appeal against the interim decision. The Hessian Administrative Court of Appeal will decide in the second and final instance whether or not the case should be challenged, and sources familiar with the matter suggest it is almost certain that the suspension will be upheld.
While the appeal is likely to be a formality, of greater significance is how the Administrative Court of Wiesbaden has ruled that the case must be heard using all documents used to support the various applications “ estimated to be several thousand pages “ in order to deem whether or not the Hessian Interior Ministry had applied its powers correctly.
This process is expected to take several months, adding to an already protracted timeline before any legal case even commences. The Hessian Interior Ministry recently responded to political questions regarding its own delays by noting that it had underestimated the scale of the operation and was overwhelmed by the documentation, a problem which was only solved when the regulatory body hired in extra help.
In the meantime unsuccessful operators are understood to have requested more information on the selection process and specifically want detail relating to the Ministry’s scoring process. The lack of clarity surrounding the licensing decision has continued to be a point of contention for operators throughout and domestic operator Digibet questioned the lack of transparency in court earlier this year.
One operator informed eGaming Review that it expects more information from the Ministry imminently, and any clarification on just how decisions were made will be of keen interest to operators and their legal teams.
Some sportsbooks will however find themselves in a position where such a delay might just benefit them.
Should Germany have gone live with its licensing structure this week, sportsbooks currently operating in the country would have been made to shut down other German-facing verticals, such as casino and poker, in order to comply. The delay has afforded a respite to multi-vertical operators with significant gaming market share.
A never-ending story
Yet overall the interim suspension has created a situation where the only certainty for operators is that nothing is concrete.
It will now be months before the case can even begin to be heard, and one successful applicant informed eGR earlier this week that it does not expect to launch in the country for as long as two years.
And this is taking for granted that the licensing process will stand up to challenge. There are growing calls for Schleswig-Holstein to walk away from the Inter State Treaty entirely, and while the European Commission is unlikely to issue the kind of ultimatum it has to Greece, even further delays to a process started in 2012 is unlikely to appease the EC.
Speaking to eGR this morning Martin Arendts, attorney for German law firm Rechtsanwalt, said the procedure has become a “never-ending story” that will require at least several months to sort out.
“From my point of view, they have to start the whole procedure again or change the rules dramatically,” he added.