Gambling monopoly

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In common parlance, the gaming monopoly refers to the state's power to dispose of publicly accessible games for assets ( games of chance ). This state monopoly for the implementation of lotteries , betting , sports betting and through casinos is mostly justified by the state's responsibility for combating betting and gambling addiction and for containing criminal concomitants.

Germany

In the Federal Republic of Germany, the concept of a monopoly for gambling is misleading from a constitutional point of view, since the legislative competence in gambling law is exercised by the federal states and there are various federal regulations.

The Federal Constitutional Court specified the state gambling monopoly in its decision of March 28, 2006 . According to this, a state monopoly for sports betting represents an encroachment on the basic right of professional freedom of private betting providers and can only be justified through consistent and credible compliance with state addiction prevention. The Federal Constitutional Court is therefore critical of the state's exclusion of private providers of betting and games of chance with simultaneous advertising of sports betting, for example by the state-licensed provider ODDSET .

In accordance with the requirements of the Federal Constitutional Court, the federal states have now signed a state treaty on gaming in Germany (State Treaty on Gaming - GlüStV). This came into force on January 1, 2008. On October 14, 2008 , the Federal Constitutional Court first dealt with the new regulations of the GlüStV. In the opinion of the court, the provisions of the GlüStV and in particular the prohibition of organizing and brokering public games of chance on the Internet (Section 4 (4) GlüStV) and the transitional provisions for 2008 (Section 25 (6) GlüStV) are reasonable and therefore constitutional not to complain about.

There is a gray area under gaming law on the Internet. Gambling can be illegal in Germany if it lacks a state license and also makes the participants criminal. However, there is virtually no prosecution for internet gambling abroad.

First State Treaty Amending Gambling (GlüÄndStV)

With the entry into force of the GlüÄndStV on July 1, 2012, another step towards liberalization was taken. The contract should be valid until June 30, 2021, but it can be extended (Section 35 (2) First GlüAndStV).

With the new treaty, the federal states are partly giving up their monopoly, but still have a considerable influence on the gaming market in the form of concession awards to private providers. An experimental clause in Section 10a of the First GlüÄndStV allows private providers of sports betting on the market for the first time. The number of licenses to be awarded is limited to 20 providers. The expanded range of providers is intended to lead illegal players back into an orderly and controlled betting system and thus counteract the black market.

The almost complete repeal of the prescribed guidelines for the content of advertising speaks in favor of further liberalization. With the First GlüAndStV, it is no longer forbidden to encourage people to gamble in advertising. In comparison, according to the GlüStV, advertising was only allowed to provide information and not encourage participation. Here, too, the state hopes to reduce the black market.

Economic Regulation Theory

Negative external effects

Negative external effects are situations in which individuals are harmed by the actions of third parties without being compensated for. In the case of gambling, the families of gambling addicts can be negatively influenced, as can the illicit raising of money to finance the gambling addiction. Also by violating the sporting integrity of professional football, e.g. B. through game manipulation, negative external effects arise.

Asymmetrical information distribution

An asymmetrical distribution of information exists when the supplier and the customer have different information about the product. In gambling, this can lead to fraud and disadvantage one side of the market.

In the case of bets at a fixed location, the attempt at fraud does not take place during betting, but rather during sporting games by third parties (e.g. manipulation of soccer games). The betting odds of the many providers ensure transparency in betting. In the case of lotteries, on the other hand, providers can cheat, for example when drawing lots.

Demerit goods

Gambling is a demeritic commodity, which means that private demand exceeds desired social demand. The state assumes that the citizen has imperfect information or a distorted preference. In this case, the state intervenes to protect the citizen from himself. The citizen may not be able to correctly assess the extent of gambling addiction and the state takes on this task. This is also evident from the state goal of addiction prevention, which is the reason for the monopoly.

Alternative approaches to the monopoly

In the case of external effects, it must first be checked whether the follow-up costs are of such great importance that intervention is necessary. In the case of regulation, the state could fall back on usage licenses and regulate the market with the help of do's and don'ts. By granting licenses, serious and dubious providers can be distinguished. As an example, single bets could be forbidden so that bets can only be made on several games in order to increase the manipulation effort. If external effects nevertheless occur, these are internalized via the selling price of the licenses.

In the case of asymmetrical information, there are also alternatives to the state monopoly. Signaling enables providers to show customers that they are a reputable betting provider. Signaling could be a seal of quality, such as the TÜV certification. However, strict control mechanisms and greater media awareness-raising can also reduce the uneven distribution of information.

For demerit goods, higher taxes or quantity restrictions in the form of licenses for consumers can serve as a regulatory instrument. The licenses allow a certain number of games in a fixed period of time.

criticism

First of all, the tax revenues generated by the state due to the monopoly are not insignificant. According to Section 10 (5) of the First GlüÄndStV, it must be ensured that a significant part of the income is used to promote public or charitable, church or charitable purposes. If the income from gambling ceases, public expenditure must be financed, cut or even canceled from the budgets of the federal states. Therefore, the tax revenue from the gambling monopoly is important and does not contribute to a reduction in gambling.

The lottery monopoly was overturned in 2012, but the state's approach has been criticized. The state is accused of taking advantage of the double dependency of private providers. Because the state on the one hand distributes licenses to private providers and thus controls them and on the other hand competes with these providers. This leads to a disadvantage for private providers, as they have to wait longer for a permit than state providers.

If private German providers are no longer competitive due to strict state requirements or the reduction in agency commission, they could be taken over by providers from abroad. These foreign companies do not need any licenses and only imitate the “real” lottery, there is no guarantee of payment, no addiction prevention and no taxes to the tax authorities. The state is losing control of the lottery gambling.

A gambling monopoly is controversial under European law , but in its Gambelli ruling in 2003 the European Court of Justice established criteria that can justify a state gambling monopoly. With its decision of September 8, 2010, the European Court of Justice declared the gaming monopoly to be incompatible with EU law because the aim of combating the dangers associated with gaming was not pursued in a coherent and systematic manner. This can be seen in particular from the intensive advertising campaigns of the state gambling operators, but also from the fact that, unlike games that were subject to the monopoly, casinos and slot machine games are tolerated despite the high risk of addiction. Public casinos are not only tolerated, they are also designed to be attractive, which is strictly forbidden in private arcades. Alcohol and smoking are allowed and there are no limits on wagering, profit or loss.

Both are incompatible with the concept of protection that forms the basis of the state monopoly. The economic report of the Research Institute for Gambling and Betting on the economic costs of monopolizing sports betting comes to the conclusion that the continued existence of the monopoly for the sports sector is not supported by either legally or economically viable arguments. Johannes Kreile is also assuming a future liberalization of the gaming market based on the latest rulings. According to Kreile, 96% of the sports betting market is already unregulated.

Austria

The Austrian gaming monopoly was also found to be contrary to European law by the ECJ. Under Austrian law, only the state is allowed to operate casinos. Only one license was granted to an Austrian stock corporation. A German citizen had been convicted of operating two casinos in Austria. The European Court of Justice ruled that the restriction of the license to domestic operators to prevent criminal offenses was disproportionate. In addition, there was a violation of the freedom of establishment and the freedom to provide services because the award of the concession had not been put out to tender.

Switzerland

In Switzerland , games of chance (casinos and lotteries) are subject to the state monopoly of the federal government. In the case of skill gaming machines, the cantons are responsible ( Art. 106 Swiss Federal Constitution).

literature

  • Martin Bahr: Gambling and lottery law. An introduction to the most important legal aspects . 2nd, revised and expanded edition. Erich Schmidt, Berlin 2007, ISBN 978-3-503-09796-8 .
  • Johannes Dietlein , Manfred Hecker, Markus Ruttig (eds.): Gambling law. State gambling treaty § 284 StGB, §§ 33c ff. GewO, SpielVO, RennwLottG, GG, EGV, GATS, EV / SlgLottVO-DDR u. a. Comment . CH Beck, Munich 2008, ISBN 978-3-406-58093-2 .
  • Luca Rebeggiani, Markus Breuer: New order, new happiness? Regulatory and fiscal policy aspects of the German sports betting market , in: Wirtschaftsdienst 2017, 97th vol. (9) pp. 655–663 ( [1] ).

Web links

Individual evidence

  1. ↑ BVerfG: Judgment - 1 BvR 1054/01. March 28, 2006, accessed on September 12, 2010 (state sports betting monopoly).
  2. ↑ State Treaty on Gambling in Germany. Retrieved September 12, 2010 .
  3. ↑ BVerfG: Decision - 1 BvR 928/08. October 14, 2008, accessed on September 12, 2010 (GlüStV).
  4. ↑ Gambling abroad - you have to be careful here , Frankfurter Rundschau , July 12th, 2016
  5. ^ A b c Hans-Peter Schneider: State gambling monopoly on the test stand . In: WiVerw 2014 . Gildebuchverlag, March 2014, p. 165 .
  6. ^ A b c Research Institute for Gambling and Betting: Research Institute for Gambling and Betting: The economic costs of monopolizing sports betting in the Federal Republic of Germany. (PDF; 1.9 MB) April 18, 2012, accessed on November 2, 2016 .
  7. ↑ Prof. Dr. Christian Koenig: The state regulation of the gaming market with a view to the coherence requirements of state monopolies under Community law . In: Springer-Verlag (Ed.): ERA Forum . tape 10 , no. 4 , December 2009, ISSN  1863-9038 , p. 513-524 , doi : 10.1007 / s12027-009-0141-4 .
  8. ↑ a b Patrick Schwarz: The state plays wrongly in the lottery. WeltN24 GmbH, September 29, 2014, accessed on November 2, 2016 .
  9. ↑ ECJ: Case C-243/01 - Gambelli. November 6, 2003, accessed September 8, 2010 .
  10. ↑ ECJ: Case C-409/06 - Winner Wetten. September 8, 2010, accessed September 8, 2010 .
  11. ↑ ECJ: Press release No. 78/10. September 8, 2010, accessed on September 8, 2010 : “Nevertheless, in the view of the Court of Justice, the German courts have reason to conclude that the German rules do not restrict games of chance in a coherent and systematic manner, given the findings they made in the present cases . On the one hand, the owners of the state monopolies carry out intensive advertising campaigns in order to maximize the profits from the lotteries, thus distancing themselves from the objectives which justify the existence of these monopolies. On the other hand, with regard to games of chance, such as casino or slot machine games, which are not subject to the state monopoly but are more addictive than the games covered by the monopoly, the German authorities operate or tolerate a policy that encourages participation in these games. Under these circumstances, the preventive aim of the monopoly can no longer be effectively pursued, so that the monopoly can no longer be justified. "
  12. ^ The change in the gambling monopoly in Germany. March 24, 2011, accessed on March 24, 2011 : “Johannes Kreile looked into this question in his article“ The liberalization of gaming in Germany is imminent ”in the August 2010 issue of“ JUST. ”. In his article he concludes that the sports betting monopoly has failed. 96 percent of the sports betting offer are de facto unregulated. "
  13. ↑ ECJ: Case C-64/08 - Engelmann. September 9, 2010, accessed September 9, 2010 .
  14. ↑ ECJ: Press release No. 80/10. September 9, 2010, accessed September 9, 2010 .