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German court rules internet gambling ban an 'impossibility'

Real politik ruling opens door for Bwin

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The the Administrative Court of Appeal in Hessen state today overturned a ruling by a lower court that had prohibited Austrian online gambling operator Bwin from providing gambling services over the internet to German customers.

The ruling focused on what the court described as the practical impossibility of enforcing a ban on internet gambling - the impossibility of which rendered the law for all intents and purposes "null and void". Thomson Financial reports.

The ruling brings Germany closer to the fold of the European Court of Justice (ECJ), which has applied steady pressure to bring member states such as France and Germany in line with EU law. After all, with the exception of certain moral or criminal concerns, member states must honor the reciprocal nature of EU trade laws, and countries such as France and Germany that run government gambling monopolies can hardly claim that allowing private gambling companies licensed in other EU jurisdictions to operate in their jurisdictions would undermine public morals.

France is already in negotiations to liberalize its market - recent actions against Unibet aside - and Sweden is also reportedly weighing the loosening of its government monopoly.

Time is on the gamblers' side in this debate, and Europe is clearly taking the lead in liberalizing the internet gaming market in all its guises, leaving the US flailing around for some kind of direction. From an international perspective, the further liberalization of the EU gambling market and the increased transparency that that implies will only strengthen the EU's hand in its WTO demands against the US.

With each passing month, the hard-line Department of Justice approach seems increasingly anachronistic.®

Burke Hansen, attorney at large, heads a San Francisco law office

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