May 03, 2012

Schleswig-Holstein issues online sports betting licences

The German state of Schleswig-Holstein has issued its first three online sports betting licences to online betting exchange Betfair, JAXX subsidiary myBet, and state lottery operator NordwestLotto, with licences for casino and poker expected to be issued later this year in summer.

“Stringent requirements ensure that only serious and commercially viable enterprises are allowed in the market,” said Klaus Schlie, Schleswig-Holstein’s Interior Minister.

Schlie said that operators wishing for a licence will have to produce extensive documentation to prove economic efficiency and transparency, as well as procedures to secure payment processing, combat money laundering and prevent fraud.

The Minister added that a collaboration between gambling providers and sporting associations was “desirable”.

“The sports federations have to do everything in their power to ensure that sporting events take place without manipulation,” said Schlie.

He confirmed that there were 23 remaining licence applications from sports betting operators, as well as 14 applications for casino and poker licences. Further licences will be granted in the coming weeks, according to Schlie.

In a statement to the London Stock Exchange this morning, Betfair said that following the receipt of its licence to operate its betting exchange, the company intends to pay 20 per cent of gross gaming revenues derived from Germany to Schleswig Holstein.

Based on current revenue run-rates, Betfair envisages that this payment will reduce Core Betfair's gross margin by approximately one per cent.

“We are delighted to have been awarded one of the first three licences to operate in Schleswig Holstein,” said Betfair's chief legal and regulatory affairs officer, Martin Cruddace. “We look forward to making a significant and sustainable contribution to the newly formed market there, offering consumers innovative products in a safe and responsible betting environment.

“Schleswig Holstein's government should be applauded for its efforts to implement a regulatory regime that will provide security for consumers, transparency for regulators and the freedom to compete for EU operators."

The German state also issued a sports betting licence to PEI Ltd, which is part of the Schleswig Holstein-based JAXX SE Group. The licences will come into immediate effect and will expire on April 30th 2018.

In a statement released this morning, JAXX said that it will now be able to launch its website, offering customers sports betting and live betting on sports such as football, tennis, handball among others.

“Bearing in mind that we are based in Schleswig-Holstein, we are of course proud to have been granted one of the first Schleswig-Holstein sports betting licences,” said Mathias Dahms, management board spokesman for JAXX. “The permit for myBet is a document of historic importance because it represents a trailblazing approach to the regulation of the gaming industry.

“The regulatory authorities in Kiel conducted an exhaustive and very demanding examination that in certain respects exceeded the standards applied in other European countries. But Schleswig-Holstein is the only German state to have understood how to go about drafting legislation that complies with both European and constitutional law and takes account of the interests of players, providers and the state in equal measure.

“The draft State Treaty of the other 15 federal states is clearly a shabby compromise that has lost its way in a bureaucratic jungle at federal level. The opposition in the Kiel state parliament, too, will now discover that having its own gaming law is good for the state, and good for its finances.”

JAXX confirmed that myBet had also applied for an online casino and poker licence, but because of the large number of applicants and the exhaustive examination process, Schleswig-Holstein’s Ministry of the Interior has indicated that these licences are likely be issued later this year in summer.

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