1) The government of Schleswig-Holstein submitted a draft act to repeal its gaming act and adopt an interstate treaty on gambling to the European Commission for review. 2) The EC has three months to review the provisions and can object or begin infringement proceedings if it contravenes EU law. 3) A British betting operator filed a complaint with the EC regarding recently adopted gambling legislation in Cyprus that could restrict betting exchanges, claiming it discriminates and breaches EU law. The complaint could take years to resolve.

1. INTHISISSUE
The Draft Act to repeal the
Schleswig-Holstein GamingAct
and adopt the Interstate Treaty
on Gambling was submitted to
the European Commission
(EC) on 6 September, by the
Government of Schleswig-
Holstein, “stipulating that the
Gaming Act [once revoked]
will continue to be applied to
licences that have already been
granted,” said Matthias Spitz,
Attorney at Melchers.
“It is interesting that the
government came to the
conclusion that notification to
the EC was necessary, given it
will prolong the entire proce-
dure and prevent a swift repeal,”
said Spitz. “The EC now has
three months to review the
provisions and, if necessary,
issue a detailed opinion to
object to the provisions.”In the
meantime licenses will continue
to be issued. The EC “has no
direct power to stop the govern-
ment repealing theAct,”said Dr.
Wulf Hambach, Partner at
Hambach & Hambach.
“However it can begin infringe-
ment proceedings if the provi-
sions contravene EU law.”Spitz
thinks that “If the EC issues a
detailed opinion, the draft act
will most likely fail.”
The Interstate Treaty on
Gambling, which came into
force in the other 14 Länder on
1 July, unlike the Gaming Act,
“has been criticised by the EC,
particularly because of the
limitation of 20 licences and the
exclusion of online poker and
casinos,” said Dr. Sebastian
Cording, Partner at CMS
Hasche Sigle. “Instead of
Schleswig-Holstein following
the other states it might have
been a better idea if the other
states had followed Schleswig-
Holstein.”
“The Interstate Treaty is
incoherent and not in confor-
mity with EU law,”said Martin
Arendts, Attorney at Arendts
Anwalte. “The licensing proce-
dure is a complete mess and
certainly not in conformity with
rules set out by the CJEU.”
Arendts explains:“The licensing
procedure has to be transparent
and must be based on objective,
non discriminatory criteria
known in advance.” However,
“the criteria for issuing the 20
Interstate licenses have not been
published yet,” despite the
application process being
underway. “The Interstate
Treaty is not transparent at all,”
said Hambach. “Applicants are
applying for licenses without
any idea of the technical
requirements, criteria or fees
involved.”
“Until the European Court of
Justice decides whether the
Interstate Treaty on Gambling
infringes EU law there will be
legal uncertainty,”said Cording.
Hambach concludes, “Legal
battles:that is my prediction for
2013.”
A New York Federal District
Judge ruled on 21 August that
poker is mostly a game of skill,
so does not constitute gambling
under the Illegal Gambling
BusinessAct (IGBA),in the case
of United States v DiCristina.
“Judge Weinstein’s validation
of this position is likely to have
a significant effect on the way in
which other judges analyse
these issues,” said David B.
Deitch, Attorney at Ifrah Law.
While Deitch believes that the
Court’s decision“will add to the
building momentum for
legalised online poker in the
US”,Frank Catania,President of
Catania Gaming Consultants,
referred to Judge Weinstein’s
decision as a“surprise”but said
that “it does not indicate that
US lawmakers are warming to
the legalisation of online poker.”
Linda J. Shorey, a Partner at
K&L Gates, observes that
despite this non-binding
decision, other Courts may
reach “a different conclusion”
on the issue. Besides, said
Catania,the decision“will most
likely be appealed and could be
reversed by an appellate Court.”
Despite the ruling, Lawrence
DiCristina, who was arrested for
hosting a no-limits Texas
Hold’em game in a warehouse,
was still found liable for prose-
cution under New York State’s
stricter state law.
Judge Weinstein’s ruling “may
be useful in states that apply a
similar standard,” said Shorey.
“But not all states define
gambling in the same way or
apply the same criteria to decide
if an activity constitutes
gambling.” For opponents of
internet poker, “other federal
statutes are available besides the
IGBA.”
Schleswig-Holstein notifies the
EC to join the Interstate Treaty
British betting operator Betfair
filed a formal complaint with
the European Commission
(EC) on 10 September, regard-
ing the recently adopted
Cypriot gambling legislation,
‘which could lead to betting
exchanges being prevented
from operating in their current
format in Cyprus,’reads a state-
ment by Betfair.
“The complaint relates to
interference with the freedom
of services,” said Elias
Neocleous, Partner at Andreas
Neocleous & Co.“However,this
is not an absolute freedom, the
EC allows restrictions justified
on grounds of public policy and
security.” Betfair’s complaint
states that any attempted ban
on betting exchanges is discrim-
inatory and a disproportionate
breach of EU law. But, contin-
ues Neocleous, “the Cyprus
government maintains that it
must observe the highest
standards of protection against
money laundering, and that
betting exchanges pose an
unacceptably high risk.”
“If the ECJ finds that the
gambling law is in contraven-
tion of EU law the Cyprus
Republic will be required to
make amendments,”concludes
Neocleous. “This could,
however, take years to resolve.”
Complaint filed
against Cyprus
gambling law
US Judge’s ruling that poker is a
game of skill “could be reversed”
Match-fixing 03
Terms & Conditions
The Spreadex case 04
UK Point-of-
consumption tax 06
US iGaming update 09
Social Gambling
Facebook’s app 10
EU The prohibition of
foreign advertising 12
India The potential for
online gambling 14
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