Court confirms considerable reservations regarding compliance of German State Treaty on Gaming with EU legislation

In the latest verdict of the Regional Appeal Court of Koblenz (OLG Koblenz of 23.09.2009 – 1 U 349/09), Lotto Rheinland-Pfalz (state lottery organisation of Rhineland-Palatinate) has been obliged to open its electronic interface for the acceptance of online lottery tickets. The ruling concerns repeat tickets for the games “Lotto 6 aus 49”, “Spiel 77”, “Super 6” and “Glücksspirale”.

The case was brought to court by a technical service provider which submitted lottery tickets of Tipp24 in Rhineland-Palatinate and other federal states. Lotto Rheinland-Pfalz had refused to accept online tickets at the beginning of January, as the German State Treaty on Gaming forbids online lotteries.

In January, however, the Regional Appeal Court (Oberlandesgericht – OLG) of Koblenz granted a temporary injunction which allowed online lottery brokers to operate. Lotto Rheinland-Pfalz was forced to re-open its electronic interface for the acceptance of online lottery tickets. An appeal against this decision lodged with a regional court by Lotto Rheinland-Pfalz led to a temporary stop, but was ultimately unsuccessful. Now the OLG has once again allowed the possibility to submit tickets online.

The court justified the decision by stating its reservations as to whether the online lottery ban introduced by the German State Treaty on Gaming was compliant with EU law. The judges share the doubts expressed by the European Commission as to whether German restrictions on gaming, including lotteries, are coherent and systematically contribute to limiting gaming and betting activities. The court stressed that online betting on horse races had not yet been forbidden in Germany and that there had been no restriction to the supply of gaming machines, also via the Internet. The brokerage of games by post is also still allowed. Customers can even submit their tickets directly to the lottery companies via computers installed at shops and kiosks of authorised lottery agents.

Lotto Rheinland-Pfalz failed in its attempt to maintain that the lottery tickets were submitted throughout Germany and not only in Rhineland-Palatinate, and that the company submitting the repeat tickets brokered by Tipp24 AG had no official brokerage licence.

The court stressed that repeat tickets which were legally brokered online in the period up to 2008 were exempt from the online ban, even if the German State Treaty on Gaming applied. This resulted from an interpretation of the State Treaty on Gaming.

Neither the restriction of lottery tickets to an individual state (regionality principle) nor the obligation of brokers to seek permission represented reasonable grounds to ban online ticket submission.

The temporary injunction is restricted to repeat tickets brokered before 31.12.2008. Repeat tickets brokered online by Tipp24 AG can thus be submitted electronically again as soon as the court’s order has been technically implemented by Lotto Rheinland-Pfalz. The service provider has informed Tipp24 AG that it will now demand swift implementation.

The court’s reservations regarding conformity with European law go even further. They also extend to the online brokerage of lottery products from 2009 onwards. However, the court has not yet issued any further temporary injunctions which would also apply to new online lottery tickets. The court justified its decision by stating that there was no urgency for such a temporary injunction as there were currently no lottery tickets waiting to be submitted via computer. This is because Tipp24 AG has stopped its brokerage activities in view of the State Treaty on Gaming and the new operator of the tipp24.com website no longer offers brokerage of Lotto in Germany, following various disputes with the state lottery companies. The court stated that the possibility of submitting new online lottery tickets again could be legally settled in principal proceedings.

Background: The German State Treaty on Gaming forbids Tipp24 AG and other private suppliers from brokering tickets for the German Lotto and submitting them to the state lottery companies via the internet. This is justified by the argument that the state seeks to protect lottery players against a possible gambling addiction. Dr. Hans Cornehl, member of the Tipp24 AG Executive Board states: “The State Treaty on Gaming is completely disproportionate with regard to online lotteries, as the alleged lottery addiction used as justification has still not been proved to be a real danger by any scientific study. At the physical retail outlets of lottery agents, players can submit their Lotto tickets completely anonymously and with much higher stakes than previously allowed by private brokers formerly active in Germany. It seems the state was really only interested in getting rid of its troublesome private competitors.”

About Tipp24 SE: Tipp24 SE (formerly Tipp24 AG) was founded in September 1999 and holds equity interests in a number of companies in Spain, Italy and the UK, which enable participation in lottery-based games via the Internet, especially via the websites www.ventura24.es, www.giochi24.it, www.mylotto24.co.uk and www.tipp24.com. In Germany, Tipp24 Entertainment GmbH operates the games platform www.tipp24games.de. From its foundation to the end of 2008, Tipp24 SE brokered tickets worth over 1.5 billion euros to the state lottery companies – in recent years over 330 million euros annually. Following its successful IPO in 2005 (Prime Standard), the company was admitted to the SDAX index in June 2009 and has been trading as a European public limited company since December 2009.

Press contact:
Tipp24 SE
Andrea Fratini
Head of Media and Public Relations
Phone: +49 40 32 55 33-660
Fax: +49 40 32 55 33-5600
E-Mail: presse@tipp24.de
Internet: www.tipp24-se.de/presse