First German Player Prosecuted For Illicit Online Gambling

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Friday, January 9th, 2015 | Written by Adam Brown

The Federal Republic of Germany maintains a monopoly on lotteries and sports wagering, whilst imposing a blanket ban on internet gambling across its 16 Bundesländer, or states. Up until now, however, the country did little to halt the thousands of Germans who regularly gamble at numerous sites online, in spite of section 285 of the country’s Criminal Code (Strafgesetzbuch) which states that:

“Whosoever participates in a public game of chance (Section 284) shall be liable to imprisonment not exceeding six months or a fine not exceeding 180 daily units.”

That may all be about to change, though, after a Munich District Court on 26 September 2014 interpreted the law to include individuals, as well as businesses, and in the first example of its kind in Germany successful prosecuted one unfortunate player for “illicit online gambling.” As a result, what had previously been seen as a symbolic criminal offense for players now threatens to set a troubling precedent for the future of online gambling and poker in Europe’s biggest economy.

Winnings Confiscated From Online Winner

The recent court case involves an unnamed 25-year old painter and decorator who between July and August 2011 won €201,500 playing blackjack online. Unfortunately, his luck ran out after transferring the sum over to his bank account and trying to withdraw the huge amount of money on five separate occasions, which subsequently put him on the radar of the German Financial Services Authorities.

Following a raid on his house, €73,490 was found hidden in a shoebox in the attic, with all but the €10,000 which apparently belonged to his mother being confiscated as the proceeds of “unlawful gaming”. In addition, the gambler was handed a €30 fine on 70 “daily units”, amounting to €2,100.

Individual Gamblers Beware

Presenting his defense in court, the gambler argued that he believed he was acting within the law, as a number of high-profile sponsorship deals involving German celebrities, such as Boris Becker (PokerStars) and FC Bayern Munich (bwin), had led him to believe that internet casino gambling was lawful.

Nevertheless, the defendants argument was dismissed because the Court said the site he had gambled on had clearly displayed its Terms of Use stating that online casinos are considered illegal gambling in certain countries. In the court’s opinion, the man should then have made appropriate inquiries to determine whether his participation on the site was permitted, which should have then been a straight forward process as the first four Google search results on the subject of casino gambling showed that such games were illegal in Germany. Dismissing any confusion between legal sports wagering in the country and illegal casino gambling, the Munich District Court highlighted the marketing activities the defendant mentioned involved German sports celebrities promoting sports betting, and stated:

“Even a layman knows the difference between sports betting and blackjack. The European Court has ruled that in the specific case of gambling, public authorities have a degree of additional control in determining the requirements arising from the protection of consumers and social order, and that it is up to each Member State to assess whether it is necessary to ban gambling and betting activities wholly or in part, or whether it is sufficient to limit and control them.”

Judgment Not Final

The decision of the court was only made public on 2 January 2015, and importantly appears to not be final, thus paving the way for the defendant to file an appeal. One factor which could give the defendant some hope is the fact the Interstate Treaty on Gambling (2008) which banned all form of online gambling was replaced with the Interstate Treaty on Gambling (2012) which permits online sports betting, horse racing, and lotteries. Therefore, it is debatable whether the incident which took place in 2011 can still be applied to legal situation in Germany today. In addition, under European laws it is questionable whether online casino games should be treated differently to sports betting.

Finally, the state of Schleswig-Holstein has already defied German authorities by issuing online casino and poker licenses to several operators, although this last point may not be valid as Digibet.com recently lost its case to offer online gambling in Germany after being blocked by one of the country’s court. As the European court explained:

“The 15 remaining states were not required to change their rules just because a single state had pursued a more liberal policy for a limited time.”