Cologne Administrative Court, 18 November 2010, 1 K 3293/07, Ref.: 1 K 33562/07 and 1 K 3497/06
In NRW, the NRW Sports Betting Act was in force until 1 January 2008. According to Section 1 of this law, the state government could authorise betting companies for sporting competitions. However, these betting companies could only be legal entities under public law or legal entities under private law whose shares were predominantly owned by legal entities under public law.
§ Section 2 of the Sports Betting Act set out the further requirements for the licence. According to this, the licence was only to be granted if the betting company offered a guarantee of proper business conduct.
The licence was particularly relevant with regard to Section 284 (1) of the German Criminal Code (StGB), according to which anyone who publicly organises or holds a game of chance or provides the facilities for this without an official licence is liable to a custodial sentence of up to two years or a fine.
This means that private betting providers who offered sports betting without such a licence fulfilled the offence of providing facilities for the unauthorised public organisation of gambling (Section 284 (1) Alt. 3 StGB) or at least that of aiding and abetting (Section 27 StGB) participation in unauthorised gambling (Section 285 StGB) and the unauthorised public organisation of a game of chance (Section 284 (1) Alt. 1 StGB).
However, according to the case law of the European Court of Justice, the prohibition orders issued on the basis of the NRW Sports Betting Act violate the freedom of establishment and freedom to provide services under European law (Art. 43 and 49 of the EC Treaty), because German law contains excessively narrow rules on the granting of gambling licences, namely provides for a state betting monopoly, thus completely excluding commercial private betting brokerage and is disproportionate in this respect.
In the above-mentioned judgements, the Administrative Court of Cologne had to decide whether the administrative orders prohibiting the plaintiff betting companies from operating in NRW on the basis of the NRW Sports Betting Act were unlawful or lawful.
Cologne Administrative Court: The Cologne Administrative Court agreed with the view of the plaintiff betting companies and ruled that the regulations on the sports betting monopoly in force at the time did not apply because they were incompatible with the freedom to provide services guaranteed under European law.
The administrative orders issued were therefore unlawful.
Source: Administrative Court of Cologne
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