March 20, 2012 / 6:53 PM / 5 years ago

EC criticises German online gambling proposals

LONDON, March 20 (Reuters) - The European Commission has criticised revised proposals from 15 German states for a new treaty on Internet gambling, saying it needed evidence that the planned restrictions, which have also drawn criticism from gambling companies, were justified.

Germany's 16 states currently have a state monopoly on online gambling, but 15 of them in December backed a new gambling law that would award 20 nationwide licences to sports betting companies.

The Commission outlined its criticisms in a letter that has not yet been published but has been seen by Reuters.

It said it welcomed changes the 15 states had made in areas such as stake sizes and the number of licences that could enable companies to operate profitably, but it did not have the information to assess the viability of the proposed system.

It also said the states had not provided data to support a ban on online casino and poker games on the basis that the games were vulnerable to rigging, had significant potential to become addictive and could be exploited for the purpose of money laundering.

Germany's Tipp24 and Britain's Betfair and Bwin.party are among those eyeing the market.

Martin Cruddace, Betfair's chief legal and regulatory affairs officer, said the proposals were clearly a long way short of satisfying the Commission.

"The proposals contravene fundamental EU free market principles and it is only right that the Commission acts to prevent member states from enacting legislation designed to keep local monopolies in and the competition out," he said.

One German state, Schleswig-Holstein, has forged its own path and passed its own gambling legislation last year.

Analysts at London-based broker Numis said on Tuesday: "The Schleswig-Holstein licensing regime has already been approved by the EC and we believe that the other States are likely to slowly come into line."

The Commission said it could bring infringement procedures if, following the implementations of the law, it proves to unjustifiably restrict competition and an EU operator's freedom to provide services.

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