www.bulletbusiness.com/ legaleurope09
Earlier this year, the new Interstate Treaty on Gambling (ITG) became effective. The legislative decided to adhere to the monopoly. In accordance with the judgement of the Constitutional Court, the ITG contains the principle to avoid further addiction to gambling.
Law firm Hambach & Hambach points out that any advertising for illegal games of chance is prohibited.
Considering the current law on online gambling, it may seem the only answer when it comes to do's and don'ts for basic advertising/
Is it really the case? Can there still be do's for advertising?
"Of course there are," says Claus Hambach, partner and co-founder of Hambach & Hambach, who is scheduled to speak during Bullet Business' iGaming Marketing Forum 2008, to be held on 28-29 October in London this year.
"From legal perspective, they can be called loopholes," he says. And these main loopholes are:
• Free to play websites: Operators who do not offer games of chance without a stake are not considered to be illegal (e.g. pokerstars.de)
• De minimis threshold – so called "50-Cent –games": In the past, there had been a legal discussion revolving around the legal definition of "game of chance" under the Federal provision of Art 284 StGB, particularly in connection with TV Shows on German TV stations. The participation fee for such games was considered to be 49 cents, and therefore, this has been set as a de minimis threshold. Various operators have offered games of chance with a participation fee of € 0.49 (such as 49jackpotcity.com)
• Games of skill: This loophole is already used by several skill game operators such as www.playjack.de (card games similar to Poker) or www.gameduell.de. The distinction between "games of skill" and "games of chance" is usually complicated – especially with regard to online games. Poker, for instance, can in general be categorised as a game of pure chance and as a game involving an element of skill. Experts agree that there are several components to the skill necessary to play poker well. These include mathematics, psychology, assessing competition, reading hands, recognising tells, exploiting position, and money management.
Other than providing an insight into such loopholes, Hambach also discussed several critical issues in this arena. Excerpts from an interview:
Bulletbusiness.com:
Claus Hambach: The aggressive prosecution policy towards online gambling companies and their commercial partners is a strategy the German authorities are planning to carry on for now. They will either be forced by courts (national courts or the ECJ) to liberate the market or they will finally realise that online gambling cannot efficiently be prohibited in practice but can only be controlled by a licencing system.
Bulletbusiness.com:
Claus Hambach: Not only the EU-commission and the courts will force the German legislator to rethink their one way path of a strict monopoly but also the fiscal interests (approx. 6 Bill. Euros / year). Also, highly influential soccer associations as well as famous German soccer clubs put massive pressure on the legislator because of a disadvantage compared to clubs abroad. E.g. Real Madrid is sponsored by Bwin with 15 Mill. Euros a year.
In the unlikely case that the above mentioned circumstances will not lead to liberalisation, it will begin 2012 at the latest. The current ITG will expire in less than 3 ½ years. Many market experts consider this as one indication that after expiration of this term – that is, from 2012 on – the German gambling market will be liberalised, at least in some segments. An amended version of the state treaty on gambling is expected.
Bulletbusiness.com:
Claus Hambach: In theory, many participants in relation with (illegal) online gambling can be made liable... operators and their CEOs, advertisers, affiliates, players, banks as well as ISP providers. The critical part for online gaming companies are possibilities to find advertising partners in Germany. German authorities as well as competitors are approaching advertisers in Germany first because in most cases it is very difficult to make operators abroad liable for their offer. German advertisers fear unfair completion cases where the state-owned operators can claim for damages or they fear prohibition orders by the authorities.
Bulletbusiness.com:
Claus Hambach: The missing uniformity can simply be explained with an example. On August 12, Real Madrid was invited to a friendly match to Frankfurt. The authorities informed SportFive as well as Real Madrid in advance that advertising for Bwin on the football shirts is considered as illegal advertising in Germany. Despite the fact that severe penalties were announced by the authorities, the players of Real Madrid were wearing the Bwin-football shirts. Due to the political pressure, sanctions by the authorities were stopped on short notice.
In other words: The authorities did not stop an action which they consider to be illegal. A disappointing situation which damages the credibility of the state in general. A similar incident happened recently in Munich where AC Milan played against FC Bayern München with Bwin shirts. Harmonised marketing rules would therefore make sense but a change on short notice is much unlikely as long as the specific sectors such as sports betting are not liberalised in Europe.
Hambach & Hambach Law Firm will be speaking at the Bullet Business 3rd Annual Legal Gaming in Europe Summit which will be taking place in London on January 26 – 27 2009. Full information can be found at www.bulletbusiness.com/
For more details please contact Ben Satchwell at +44 (0)20 7375 7163 or email ben@bulletbusiness.com
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