Future of gambling

This weeks' ruling by the European Court of Justice overturning Germany's gambling monopoly centered on whether Berlin's consumer-protection argument was valid or not. But the consequences from the decision by the Luxembourg court is expected to be felt first and foremost in a seemingly unrelated field - advertising revenues.

"We're talking about a huge market here, for this includes both advertising revenue from foreign companies and also online betting operators in Germany," Michael Schmid of media consultancy Goldmedia told Deutsche Welle.

Private sports betting companies would most likely go to sports clubs for advertising, putting their logo on the players' jerseys and potentially creating massive revenue opportunities for sports clubs.

Millions in advertizing revenues lost

According to German soccer legend Franz Beckenbauer, clubs miss out on as much as 400 million euros ($519 million) annually from advertising from bookmakers. Foreign clubs that play in Germany must go to the trouble of removing any gambling ads from their kit for the matches.

Germany's official line is that the gambling monopoly is there to prevent people from becoming addicted. It says controlling gambling operations, allows the state to prevent addiction from getting out of hand.

But consumers can easily bypass the state monopoly; government statistics show over two million people in Germany gamble online using foreign Web sites based abroad.

"If the regulations on the sports betting market were lifted, all the operations that are currently under the table would be moved into the legal realm," Schmid said.

"Germany thinks that by imposing this monopoly it is preventing people from gambling. This isn't the case. The people are simply betting elsewhere. If these people were betting in Germany, then the government would have a real chance to establish policies that could curb addiction," he added.

EU points out inconsistency of monopoly

The European Court of Justice identified a different aspect of Germany's gambling monopoly that it saw as being flawed: its inconsistency.

"On the one hand, you've got sports betting and lotteries that are completely state-controlled," said Torsten Stein, a professor of the European law at Saarland University.

"On the other hand, however, the small casinos are given free rein. People can play slot machines on just about every street corner, and these casinos can advertise all they want."

Studies have repeatedly shown that slot machines are the most addictive form of gambling, Stein said, adding that "it's no wonder that the courts have questioned the effectiveness of this monopoly."

Representatives of Germany's 16 federal states are to meet next week to find a solution to the country's gambling dilemma.

There are two possible outcomes: Either all types of gambling will be state-regulated and advertising prohibited, or Germany's sports-betting market will finally be able to operate unrestricted.

Author: Gabriel Borrud (ai)
Editor: Chuck Penfold