In a decision that delighted local German sports officials and disappointed the private sector, Germany's highest court ruled against breaking up the state monopoly on sports gambling.
State-sponsored betting does more to protect consumers, said the court
After months of deliberation, the constitutional court decided to keep Oddset, the state-sponsored monopoly on sports gambling intact, further securing 500 million euros ($604 million) in yearly tax revenue for the German government.
The decision was a blow to gambling operators and the German Football Federation, who had hoped the court would finally break up the Oddset monopoly, freeing up the 3 billion euro German gambling market for new competitors. The market's beneficiaries, local sports officials, breathed a sigh of relief.
500 million euros secure, for now
"It's a great decision for sports," said Manfred von Richthofen, chief of the German Sports Association (DSB) to the broadcaster MDR. Von Richthofen sees the monopoly as the only lifeline for local sports association, who receive most of the tax revenue pulled in by Oddset and licensed sub-partners.
"The fact that the state monopoly is admissible is a clear advantage for sports," he said. The Oddset monopoly offers betters the opportunity to bet on sports with fixed rates on winnings.
Local sports receive up to 500 million euros annually from Oddset
The judges did ask lawmakers to restructure the monopoly so that it does more to contain gambling addiction. They set the end of 2007 as a deadline. The decision indicated the court preferred a state-controlled monopoly -- in its current form -- which isn't nearly as profit-driven as an open gambling market and can better protect consumers.
Private companies, arguing before the court, disputed the claim. They said that Oddset, which enters into sponsoring partnerships and advertises across the country, could not at the same time be expected to warn consumers of the dangers of the product they're advertising. The court took the complaint into account in its decision, as the call for a restructuring to do more against gambling addiction proves.
But companies, including Germany's national soccer association, had hoped the court would do more, opening up the competition in time for the World Cup.
Monopoly coming to an end
While they won't get access to the market in the near future, experts doubt the monopoly can last much longer. According to a report in the Süddeutsche Zeitung, most of the betting done by Germans is done through companies that continue to operate with a licensed issued in the old GDR -- the only exception to the monopoly.
End of the monopoly?
With its limitless win potential, the increasing popularity of online gambling -- a more than $300 billion industry worldwide -- could also hasten Oddset's end.
"The entire system is coming to an end, " Dieter Frey, a Cologne lawyer and gambling expert told the Berliner Zeitung. "The monopoly virtually no longer exists."