German court declares lottery monopolies unlawful

German state lottery monopolies are facing an uncertain future after a court in the country ruled that such systems are unlawful.

The Administrative Court of Munich last week opted to uphold a complaint put forward by a Bavarian company that had been blocked from launching a lottery in the Upper Palatinate administrative district.

According to ISA-Guide.de, the Bavarian Ministry of the Interior turned down the request after ruling that the unnamed operator was not qualified to operate a lottery in the state, despite having submitted a number of revised applications.

However, while the Munich court ruled this rejection was acceptable as the operator did not have sufficient financial means, it also said that the state’s reluctance to open up the market and seemingly retain a monopoly contradicts Article 56 of the Treaty of the Functioning of the European Union (TFEU), which includes measures against the protectionist impulses of European (EU) member states.

EU rules currently state that countries are able to maintain monopolies to take greater control over gambling, but this only applies in certain circumstances.

In February, all 16 German states are due to meet to discuss uncertainty over the current situation in the national gambling market and whether this ruling may present opportunities for international operators.

Lottoland, which allows punters to bet on the outcome of major lotteries around the world, has spoken out in support of the Munich ruling, while ZEAL has also praised the decision.

Sebastian Blohm, head of corporate and legal affairs, at ZEAL, said: “We welcome this ruling which clearly highlights the illegality of the current monopoly system.

“For too long, the lottery industry has been closed to competition – denying customers choice and stifling innovation.

“In a world where we can book a holiday with one click and buy music at the touch of a button, the lottery industry is stuck in a time-warp.

“It’s time the industry was opened up to competition.”

Related article: Germany’s gaming laws branded a failure in new study