Breaking News: Schleswig-Holstein awards first egaming licences

JAXX SE, Betfair and Die NordwestLotto Schleswig-Holstein have been announced as the first three operators to be awarded an online gambling licence in the German Land of Schleswig-Holstein and, from today, will be able to offer their customers regulated online sports and exchange betting.

The licences were granted this morning by the Schleswig-Holstein Interior Minister Klaus Schlie and will see the company launch a dot.de variant of its Mybet site, offering sports betting, with applications for casino and poker likely to be ratified in time to launch the products by the summer.

A Betfair spokesman said the company was preparing to put out an RNS “imminently” to the market announcing that its exchange betting licence application had been accepted in Germany’s northernmost state – the only state in which online gambling is now fully regulated.

The exchange betting operator’s chief legal and regulatory affairs officer Martin Cruddace commented: “We are delighted to have been awarded one of the first three licences to operate in Schleswig Holstein. We look forward to making a significant and sustainable contribution to the newly formed market there, offering consumers innovative products in a safe and responsible betting environment.

“Schleswig Holstein’s government should be applauded for its efforts to implement a regulatory regime that will provide security for consumers, transparency for regulators and the freedom to compete for EU operators,” he said.

Lukas Wagner, one of Betfair’s public affairs team in Germany called its licence acceptance an “historic moment for us (and the rest of our industry) as for the first time ever, an online gambling company finds itself licenced in Germany”. In January Betfair anounced it would sponsor the 2012 MOD70 Sailing Cup in Schleswig-Holstein’s capital Kiel as part of a sailing championship taking place from 29 August this year. Betfair has also been named as a partner of the Kieler Woche, the largest sailing event in the world, which is held in the same city in June.

Since the announcement the company’s share price has risen over 4%, up to 829p, while bwin.party, which saw its share price fall 16% after the other 15 German Länder announced proposals to license sports betting with a 16.6% turnover tax, rose 2% to 153.7p.

Fellow operator PokerStars last year announced it would sponsor local football team vFB Lubeck’s home stadium, renaming it the PokerStars.de stadium.

A bwin.party spokesman told eGaming Review it was “good to see the first tranche of licences being accepted within a pragmatic and EU-compliant regime”.

“Given the large number of applicants we expect to receive notification of our licence shortly,” he added.

eGR understands there are currently 23 sports betting licence applications in the state with 14 other applicants awaiting news on whether or not their casino and poker licences – including roulette, baccarat and blackjack – have been successful or not. This is expected to be announced in the coming weeks. Schleswig-Holstein has a population of close to 3m inhabitants.

Mathias Dahms, CEO of JAXX’s subsidiary company based in Schleswig-Holstein, said: “We are particularly proud to hold one of the first Schleswig-Holstein sports betting licenses in our hands. The approval for mybet is a historical document because it represents a move towards further regulation of the gaming system. The regulatory authority in Kiel has created a particularly complex and demanding procedure that goes well beyond the requirements of other European countries ““ a very tough job.

“Schleswig-Holstein is seen as the only state to formulate a European and constitutional law-compliant regulatory framework, which takes into account the interests of the players, the provider and the country alike. The draft treaty of the other 15 states is obviously a bad compromise, and is now at a standstill. The opposition in the state parliament will now find that their own gambling law is good for the country and its finances,” Dahms explained.

The application process was opened on 1 March, with 86 operators expressing an interest in entering the market, after the Land parliament rejected a bill put forward by the opposition SPD party looking to repeal the State’s online gambling act.

Under the terms of regulation all products will be allowed, with operators will be subject to a 20% gross profit tax.

On 15 December last year, the 15 other Länder signed a second draft treaty with the provision that they would only implement it if the European Commission gave them the ‘green light’ to do so, however in March the EC issued a detailed response rejecting Germany’s revised proposals with several sources, including the Minister of Economy, claiming this could spell the “end of the road” for the bill in its present form.

The Commission criticised their proposals for failing to address its main concerns over its compatibility with European law with Jörg Bode, Minister of Economy and deputy Prime Minister for the state of Lower Saxony saying the treaty had “failed in its present form”.

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A €1bn regulated German egaming market – three scenarios:

The German market is estimated to be worth more than €1bn. eGR’s exclusive data partners H2 Gambling Capital in last month’s issue of the monthly magazine modelled three scenarios for the German egaming market.