International Online Gambling Laws

One development preceding the publication is Germany’s Federal Constitutional Court’s recent ruling that the German sate monopoly of sports betting must be ended by 2007.

The aim is, we understand, for a standardized and controlled approach to online gambling on professional events through private betting companies. Until that time, and to the disappointment of those that might have wished to take advantage of German citizens certain interest in gambling upon the World Cup in their nation this summer, it seems the state monopoly will continue to operate (with bookmakers not licensed in Germany prohibited from taking bets from German citizens).

The Federal Constitutional Court’s decision will see Germany adopt a more congenial approach towards online gambling Act 2005 (GA). The GA does not seek to close its doors to online gambling operators from overseas. It has, instead, chosen the licensing route as the means of regulation which contemplates current practice in the online world, illustrated by provisions regulating betting exchanges.

Conclusion

Much to the chagrin of certain countries and states, online gambling, provided by offshore operators, is not going to go away.
There are signs that current laws seeking to prevent or limit online gambling by overseas operators may have a short shelf life. The tentative conclusions revealed by Mr Skala of the Swiss Institute of Comparative Law are that certain European Member States may be failing to make real assessments of proportionality and are disguising their own fiscal objectives by seeking to restrict the freedom of offshore gambling organizations.

The recent ruling in Germany and the GA in the UK seem to be supportive of a path towards acceptance of online operators based overseas. The WTO has already ruled against the US for attempting to block internet gambling by its citizens with foreign companies based in countries where internet gambling is legal.

However, changes to the regulation of offshore or foreign online gambling operators may not mean greater liberalizations of gambling, Greece attempted to ban all forms of internet gambling in 2002, and this may yet be the route that the US looks to take.

Warren Phelops, Partner ( UK ) and Linda Shorey, Partner (US) are heads of the International Betting & Gaming Law Group at Kirkpatrick & Lockhart Nicholson Graham LLP. They would like to thank Ben harris, a member of their team, for his help in preparing this article.

This article is for informational purpose and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer.

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