Austrian Online Gambling Giant Bwin Loses Bet In Lower Saxony

Austrian online gambling giant Bwin was left reeling again last Tuesday after the Hanover Administrative Court threw out the company’s suit against Lower Saxony. The action was aimed at lifting the German state’s two-year ban on non-German games operators.

It is the second major blow this month for Bwin, who lost a similar suit in North Rhine-Westphalia. The Viennese company, which relies on Germany for a third of its sales, sought to have courts in that state suspend execution of the ban until a federal court could rule on the issue. However, Judges in North Rhine-Westphalia rejected the suit on Sept. 11.

At issue is Germany’s status as one of the few remaining EU members to ban those inside its borders from gambling with institutions and firms based outside Germany. Though the ban violates EU trade agreements, companies like Bwin continue to suffer because it was enacted by each of the country’s states individually—not by Germany’s federal government.

The ban gives an exclusive monopoly to Germany’s state-run lotteries. It was approved by all 16 German states in 2007 and renewed on Jan. 1, 2008 in spite of EU mandates requiring the free movement of goods and services between member nations. EU regulators have consequently started proceedings against Germany over the ban.

Judge Werner Reccius, who presided over the hearing, said, “We have no doubt the German state monopoly on Internet betting is legal and have ruled so several times.

”This ruling only applies in Lower Saxony, but if it prompts Bwin to shut down its websites in all of Germany, this would only reflect what the law actually is.”

Yet courts in Hesse and Bavaria have upheld Bwin’s right to operate within state borders ruling that it would be technically impossible for the company to locate its clients.

What’s more, Bwin lawyer Clemens Weidermann of the law firm Gleiss Lutz made the case that the state was violating the company’s constitutional rights:

”What the court is contemplating here is putting Bwin out of business, and it’s negating my client’s constitutional right to freely choose a profession,” he said.

Reccius would not entertain either argument, saying, “In combination with mobile phones, it’s possible to locate a client and, thus, block access to players from a particular
territory.”

However, he did allow Bwin to appeal the decision, saying, “Many courts hold a different view from ours, so it’s worth having this ruling reviewed by a higher court.”

According to Bwin spokesman Kevin O’Neal, that is exactly what the company will do next:

“This ruling does not correspond to EU law,” he said. “We will appeal the ruling in Lower Saxony and are confident that EU law will be adhered [sic] in the end.”