01 | 2006
Transcrição
01 | 2006
ISSN 18617441 Betting Law News 01 | 2006 Latest developments in German and International Betting and Gaming Law Inhalt 1. The German Constitutional Court will make its decision on sports betting before the start of the FIFA World Cup 2006 _______________________________________________________ 2 2. Ban on betandwin.com and competitors in Germany – the truth behind the judgement by the Regional Court of Cologne of 2nd February 2006 _____________________________3 3. Just wireless or really mobile? _____________________________________________________ 7 4. Telephone Betting – An Industry Waits For Deregulation In A Booming Market ________11 5. OLG of Brandenburg substantiates requirements for data protection obligation ______ 16 6. European Commissioner plans immediate Steps to open Gambling Markets ___________18 7. Our information _________________________________________________________________20 8. Editorial Details _________________________________________________________________ 22 Betting Law News 01 | 2006 1. Hambach & Hambach Rechtsanwälte The German Constitutional Court will make its decision on sports betting before the start of the FIFA World Cup 2006 A report by Attorney-at-law, Dr. Wulf Hambach Following the German Constitutional Court’s (hereinafter, BVerfG) oral hearing on November 8th on the constitutionality of the state sports betting monopoly (we reported on this issue in the 08/05 edition of Betting-Law-News) the BVerfG has announced that it will make its decision before the end of March. As we reported in the 08/05 edition of Betting-Law-News, at the very beginning of this long awaited oral hearing BVerfG Judge Prof Byrde (the senate reporter) stated: “I am sure that bets will also be taken on the outcome of these proceedings.” Although die-hard experts themselves had been counting on a decision of the BVerfG coming after the World Cup because of its great economic significance, the day on which this betting event will take place is now certain. According to an BVerfG press release (No. 15/2006 dated 6 March 2006) the First Senate of the Constitutional court will announce its decision in the "Sports betting" proceedings based on the oral hearing of November 8th 2005 on Tuesday, 28th March 2006 at 10 O'Clock in the conference room of the Constitutional court Schloßbezirk 3, 76131 Karlsruhe. Persons interesting in attending the announcement of the decision, please apply to: Herrn Oberamtsrat Kambeitz Postfach 1771, 76006 Karlsruhe Fax: 0721 9101-461 © 2006 Hambach & Hambach Rechtsanwälte 2 Betting Law News 01 | 2006 2. Hambach & Hambach Rechtsanwälte Ban on betandwin.com and competitors in Germany – the truth behind the judgement by the Regional Court of Cologne of 2 nd February 2006 A report by RA Dr. Wulf Hambach, Hambach & Hambach At the beginning of February 2006, media reports stated that the Regional Court of Cologne (LG Köln) had banned the provision of gaming and sports betting in Germany, among others for the online providers "betandwin“, "intertops“, "unibet“ and "bet365“ (see www.isa-casinos.com/articles/11282.html). This statement has temporarily unsettled the media and entertainment sector. However, it soon became obvious that this statement could not be maintained in this form. On the one hand, for instance, the betandwin decision only applied to the ".com" offers of the Austrian provider of sports bets and not to the sports betting site www.betandwin.de designed for Germany, which, as is well known, is based on a so-called GDR sports betting licence. The state-owned provider Westlotto as the designated plaintiff among the Deutsche Lottound Toto-Block (German association of state-run providers) applauded the "consistent continuation of the LG Köln's legal practice". However, there is more behind the decision by the 31st chamber for civil law of the LG Köln than just the judgement itself. This decision (which the LG Köln gave as the court of first instance in these proceedings) banned the Austrian provider of gaming and betting, Betandwin International Ltd., from offering and/or marketing games and/or bets via their domain www.betandwin.com in Germany (judgement of 2.2.2006 – ref. 31 O 605/04). However, this elation is premature, as the judgement will not hold water in various respects. Cologne legal practise in criminal law cases was not considered Among insiders of the sector, the Regional Court of Cologne is – just like the Regional Court of Hamburg – well known for its negative attitude towards private providers of sports betting and casino games. In so-called warning notice proceedings, where the stateowned providers of lotteries and sweepstakes accuse private providers at regular intervals of violating the Act against Unfair Competition (UWG) through their offers, the stateowned companies as a matter of principle win the cases. This decision-making demeanour has recently led to an embarrassing result which also is alarming as far as validity of the principle of the rule of law is concerned. This is because on the very same day, the 14.7.2005, criminal law judges of the LG Köln (ref. 105 Qs 80/05) came to a different conclusion than the civil law judges of the LG Köln (ref. 81 O 30/05), even though the two decisions were based on comparable facts from the sports betting law point of view. The © 2006 Hambach & Hambach Rechtsanwälte 3 Betting Law News 01 | 2006 Hambach & Hambach Rechtsanwälte Criminal Court of Cologne decided that § 284 StGB (German Criminal Code) does not comply with European Law, while the Civil Court of Cologne held that § 284 StGB was applicable and thus adjudged that the activities of the sports betting provider with a European licence represented a violation of fair trade. These contradicting results in spite of similar facts (EU cross-border provision of services from the sector of sports betting) cause even more uncertainty among people seeking legal advice and even more incredibility for the judiciary, noticeable in Germany in this sector for several years already. Neither the civil courts in Cologne competent for decisions in cases of warning notices, nor those in Hamburg feel prompted to modify their position against the background of the well-known Gambelli decision (ECJ, Judgement of 6th November 2003 – ref. C-101/01), contrary to the practice of several other courts. In spite of this attitude by the Regional Court of Cologne being well known among providers and specialised lawyers, the new betandwin decision still is surprising for three reasons: Judgement before decision by Constitutional Court First of all the Regional Court saw no reason to wait for the pending decision of the Federal Constitutional Court (BVerfG) on the subject of sports betting. This is surprising, as the proceedings in this case concern the compatibility of § 284 StGB with the constitution. Furthermore, in the run-up to its decision the BVerfG has also instructed numerous administrative authorities not to execute interdiction orders. Even if the LG Köln's view in this matter has been known for a long time, it still would have had to wait for the imminent decision by the BVerfG. This is because the decision also has direct influence on the facts in the case in hand, in which the LG held that an illegal operation of gaming and thus a violation of the provisions of the UWG was to be assumed. Non-consideration of relevant BVerfG jurisdiction and defiance of ECJ guidelines Another remarkable point is that the LG Köln has not brought the controversial questions from European Law before the ECJ. The first senate of the BVerfG (2nd chamber – ref. 1 BvR 223/05), for instance, regarded the consideration of the Gambelli jurisdiction to be essential for the evaluation of the facts in a similar case and commented as follows in this context: "In view of these remarks by the European Court of Justice, the conformity of the legal situation in Germany with community law could hardly be determined in the main administrative law proceedings without presenting the case to the European Court of Justice. Thus, it cannot be treated as sufficiently secure for the evaluation of the special enforcement interest in the administrative interlocutory proceedings, either." © 2006 Hambach & Hambach Rechtsanwälte 4 Betting Law News 01 | 2006 Hambach & Hambach Rechtsanwälte In this context, the renowned Professor Dr. Hans-Detlef Horn is even more explicit and comments in one of his numerous specialised essays in the Gewerbearchiv 2005: "As long as no final decision has been given with regard to the illegality of the private offers, marketing of such offers cannot be inhibited using the "detour" of competition law in order to protect state-run offers." Thus, the judgement clearly seems to violate EU Law. In defying EU Law, the LG furthermore disregards clear guidelines set by the BVerfG in this context. Regional Court forestalls decision by the German Patent and Trademark Office The judgement by the LG Köln also was surprising with regard to its comments on trademark law. This is because Betandwin was banned from continuing to use the term "supertoto" and "supertoto XXL" respectively for the "area of the operation of gaming, in particular of sports bets". It held that these names were likely to be confused with the registered trademark "TOTO" of the state-owned plaintiff Westlotto. In the reasons given for the decision, the court assumes that the term "TOTO" does not represent a descriptive term, but a purely imaginary word coined by Westlotto. The fact that the term "TOTO" is quite obviously an abbreviation of the gaming form Totalisor and has for some time no longer been offered exclusively by Westlotto, has apparently not been sufficiently considered by the court. Corresponding cancellation proceedings are already pending with the German Patent and Trademark Office. In spite of having knowledge of these proceedings, the LG did not consider this and has forestalled the decision by the Federal Office. From our point of view, the Patent and Trademark Office will in all likelihood reach the result that Westlotto is to be denied the protection of trademark law for the trademark TOTO and that the registration is to be cancelled. We come to this conclusion, as the German Federal Court of Justice (BGH) has already decided a practically identical case. The highest German civil court held in its resolution of 19th January 2006 (decision of 19.1.2006, I ZB 11/04) for the case of the trademark "LOTTO" that this trademark had to be cancelled. According to the BGH's view, the Federal Patent Court had, when answering the question whether the generic term "Lotto" had been transformed into an indication of the operator of the respective game of lottery, justifiably not exclusively taken into account the comprehension of the players of the lottery, but of all consumers to whom the offers of such lottery games are directed. It also had to be considered that the word "Lotto" is a term which describes the essential characteristics of the goods and services involved. For such product descriptions, a general acceptance in commerce as an indication of origin could only be considered, if a predominant part of the targeted commercial circles saw the © 2006 Hambach & Hambach Rechtsanwälte 5 Betting Law News 01 | 2006 Hambach & Hambach Rechtsanwälte term as an indication of the origin of the game from a certain provider and not as an indication of the provided game itself. Even if the consumer associated the term "Lotto" with the state-run lottery companies, this would still not represent stringent proof of the transition of the meaning of the word from a descriptive statement to an indication of origin. Conclusion All in all, the jurisdiction with regard to the Act against Unfair Competition (UWG) is not convincing in many respects and will probably be overruled in one of the higher instances – even if this does not happen before a court of appeal in Cologne. Should the Federal Constitutional Court decide in favour of a partial opening of the German sports betting market in April, this would mean – at last also for the UWG judges in Cologne and Hamburg: Think again! © 2006 Hambach & Hambach Rechtsanwälte 6 Betting Law News 01 | 2006 3. Hambach & Hambach Rechtsanwälte Just wireless or really mobile? The circuitous route to Mobile Gaming – Developments in Nevada/USA, Great Britain, Austria and Germany RA Dr. Wulf Hambach and RA Dr. Hendrik Schöttle, Hambach & Hambach The fact that M-Commerce has a large potential for development has in the meantime become common knowledge (we reported on this subject in BLN 09/2005); Mobile Gaming in particular is attributed with considerable growth opportunities. Looking closer at all the things that are now called "Mobile Gaming", one cannot help but think that the term has become just as dazzling, colourful and contourless as the slogan "Multimedia" was in the 90s. Telephone? Not that new, really The business of accepting bets via telephone (see also article on p. 10 in this newsletter) is really not that new. However, to talk about Mobile Gaming, just because customers can now simply reach out for their cell phones, would be missing the point. It is true that the legal framework within which the telephone gaming providers are acting, corresponds in large parts to the regulations valid for applications for cell phones, PDAs and Smartphones. However, the telephone concept does not make any distinction between fixed line and mobile telephones. There is no difference whatsoever between the player placing a bet on his team's match at home in front of his TV set or from the West stand in the stadium – except maybe that acoustic understanding is somewhat easier in a quiet living room. Mobile Gaming with a different meaning... However, even if the usual high tech components such as PDA or pocket PC are being used, the result does not necessarily have to be the concept understood by the term of Mobile Gaming. In the US State of Nevada, Assembly Bill No. 471 was passed last year, which has also become known as the "Mobile Gaming Bill" (see also article "Nevada Takes on Mobile Gaming" by Anthony Cabot in Casino Lawyer, Winter 2005). The legislator there hints at his idea of Mobile Gaming in Section 2 of the Bill: “Mobile gaming” means the conduct of gambling games through communications devices operated solely in public areas of an establishment which holds a nonrestricted gaming license and which operates at least 100 slot machines [...]. It is obvious that the described concept of Mobile Gaming has little in common with real mobility. Through the restriction of the location to public areas of casinos which offer a © 2006 Hambach & Hambach Rechtsanwälte 7 Betting Law News 01 | 2006 Hambach & Hambach Rechtsanwälte sufficient number of slot machines anyway (hotel rooms in such casinos, for instance, are already excluded from the regulation), the concept that can be implemented is neither very innovative nor does it open up new markets. A – welcome – addition is that effective age verifications must be carried out in order to refuse access to minors. It remains to be seen how the restriction of the location and the age verification can be implemented technically. Should the "hardware" available to the player – for instance his mobile telephone – not be sufficient, special developments would become necessary. It may well be possible that in the end the only thing that can be realised is a pretty gadget which the casino can hand out to its guests and re-collect at the end of the visit. An appliance like that would be just as mobile as a wireless fixed line telephone and as universally applicable as a portable audio guide in a museum. It would be a far cry from Mobile Gaming, at least as far as its operating range is concerned. The "progressive British" approach The situation will – soon – be different in Great Britain. Its Gambling Act 2005 defines Remote Gambling in Section 4. Pursuant to subsection 2, the telecommunication means used in this context include the internet, telephone, television, radio and any other kind of electronic or other technology for facilitating communication. According to the explanations by the British Department for Culture, Media and Sport, this regulation has deliberately been worded openly, not only in order to cover existing technologies such as mobile telephoning or interactive television, but also in order to be open for future developments. There are no restrictions with regard to location in the Gambling Act – only the licensee’s facilities must be located in Great Britain (Section 70, subsection 2 of the Gambling Act). And what about Germany? The German gaming market currently is being subjected to radical changes – not such a brand-new piece of information. So far, no corresponding regulations exist in the area of mobile gaming offers. However, as already described in the last Betting Law Newsletter 09/2005, there are numerous regulations on E-Commerce, which are also valid for MCommerce and thus for Mobile Gaming – even if they have not been specifically tailored to this area (which by the way causes a multitude of problems in implementation). In Germany, too, state-owned providers of gaming are up with the times with their gaming offers. For instance, the state-owned provider of sports bets, ODDSET, advertises the simplicity of handling the technology on the homepage of German football © 2006 Hambach & Hambach Rechtsanwälte 8 Betting Law News Hambach & Hambach 01 | 2006 Rechtsanwälte championship record holder FC Bayern Munich (official broker of ODDSET sports bets, compare www.fcbayern.t-com.de/de/partner/oddset/index.php): "Whether you are crossing your fingers for the Bayern team at home in front of your television, watching the live ticker on the homepage, or are rooting for the team in the stadium: With mobile ODDSET bets you can not only win real cash with a correct text message tip, you are, at the same time, supporting the FCB youth work. Betting and winning has never been as easy as this!" However, looking at ODDSET’s game instructions it becomes clear that a simple user interface just does not exist. If the player wishes to place a bet via a text message, he must compile a string of characters, which might remind computer scientists of a Ping of a certain IP address, however, does not mean anything to anybody else. One example of a combination bet: xxxx_3aus4_110_202_221_381_20 (source: www.oddset.de/anleitung/odd_top_frame_anleitung.html). It must be doubted whether such offers do everything necessary to comply with the transparency requirements of distance contract law, let alone with the even more detailed obligations in electronic business relationships. This – obviously not that simple – possibility of betting is, for instance, probably not consistent with the obligation determined in § 312e section 1 No. 1 of the German Civil Code (BGB), to "provide [the customer] with appropriate, effective and accessible technical means, which enable him to identify and correct typing errors before issuing his order." A twist in the figures can cost the player up to 50 Euros. Against this background it can hardly be assumed that it is enough to refer the customer to the possibilities of correction offered by his mobile telephone while he is typing his text message. Austria: identical regulation, better implementation Once more it is competition that shows that other solutions are possible: The private provider Betandwin also offers sports bets via text message (see also p. 10 in this newsletter). However, here the player is not asked to compile a 30-digit string of characters using playing instructions (which typically are not available anyway on the road), but the player is led to the intended bet through various text messages in a process of interactive questions and answers. In order to prevent typing errors, the player then again is sent a plain text message of the information he has given. Only after this text message has been © 2006 Hambach & Hambach Rechtsanwälte 9 Betting Law News 01 | 2006 Hambach & Hambach Rechtsanwälte confirmed is the bet regarded as having been placed. Betandwin so far only offers this service in Austria, Italy and Spain, however, the E-Commerce-Act (ECG) valid in Austria contains a provision which is identical to the German regulation (compare § 10 Section 1 ECG and § 312e Section 1 No. 1 BGB). And the winner is… The Nevada model has at best borrowed its name from Mobile Gaming. In contrast to this, Great Britain has a regulation with hardly any loopholes. Germany is different: here even state-owned providers take certain liberties with regard to the legal conformity of their offers; a look at Austria, on the other hand, shows that the problem can be solved differently. It would be highly desirable if the regulation of the gaming sector to be expected in Germany directed the market of Mobile Gaming into co-ordinated channels – for private as well as for state-owned providers. The result of not supervising state providers of gaming at all was able to be seen in the betting scandal surrounding football referee Robert Hoyzer: “Ante Sapina, Hoyzer and their cronies were no betting Mafia, rather they acted a little like insurance fraudsters for whom the system made everything very easy. It was the state-run Sportwette Oddset, whose representatives only recently pleaded before the Federal Constitutional Court for a continuation of “canalising” the gaming impulse in the population with the help of a betting monopoly, who hardly set any limitations for the offenders." Tagesspiegel - 18.11.2005 © 2006 Hambach & Hambach Rechtsanwälte 10 Betting Law News 01 | 2006 4. Hambach & Hambach Rechtsanwälte Telephone Betting – An Industry Waits For Deregulation In A Booming Market By Jens Leinert Telephone Betting by WAP and Java Applications Betting on sporting events in Germany is enjoying ever increasing popularity. According to a study by the Cologne institute „Sport + Markt“ around 7 million German citizens are already active gamblers and some 10.4 million take an interest in betting services. Within the market, there is particular potential for mobile betting. Providers of mobile betting and gambling services are themselves betting on gambling enthusiasts’ desire to place bets on their favourites on the way to or at sporting events. But how does that work if you’re already en route to the stadium and you want to quickly put some money on your team? In order to do so at present, mobile betters must set-up a WAP application or download and install an appropriate Java application. The provider BetandWin (wap.betandwin.com) is one of the pioneers of mobile WAP. Betandwin also offers registered users from Austria, Italy and Spain a betting service by SMS. Through a text message request the player is able to navigate through the service, choose his desired fixture and convey his stake. Nowadays It is common practice for sports betting providers to send out winning notices by SMS. This demands advanced knowledge in the use of internet-ready mobile phones from the target group. As anyone who has ever tried to check his/her e-mails by mobile phone knows, the use of mobile internet isn’t simple and many of those interested in betting who are not so technophilic will not want to grapple with this technology. Current SMS services uptil now have simply been in the form of participation in a lottery on television quiz programmes. A choice is made by premium SMS from various possiible answers and the winner is then identified from all of the correct answers received. Taking part does not require pre-registration and payment takes place by way of a premium SMS on the user’s telephone bill. Other than lotteries, it is difficult to find any other interesting gambling services offered by Premium Messaging or Premium. It was until now impossible for providers to run a lucrative business as the net profit from these services was too small. Telephone Betting In Call Centres It is much easier to call a betting provider and simply say „I bet €50 that Bayern München are going to win“. However this means that betting providers must operate a call centre, possibly open 24 hours a day – which drives up costs and brings down profits. The provider Sportwetten.de PLC started to operate such a service for on horse-racing at the beginning © 2006 Hambach & Hambach Rechtsanwälte 11 Betting Law News 01 | 2006 Hambach & Hambach Rechtsanwälte of Febuary. The expansion of this service across the whole betting spectrum is taking place within the scope of the general legal framework. Telephone Betting by Speaking Computer At present however it is possible to fully automise call centres for the receipt of bets and to have the process handled by a speaking computer. This was impressively demonstrated at the VOICE contest during the VOICE Day in Bonn (http://www.voiceday.de). At the VOICE contest, the participants had 5 days in which to develop a betting application to serve as a voice-operated information and betting portal for the World Cup 2006. In the framework of the task, there were two groups of four teams, in which two-thirds of the games were already finished. In addition, for the final four contests odds were set for a tendancy bet i.e. for the prediction whether the team would win, lose or draw. A long term bet could also be made on who would win the World Cup. The players could authorise their participation with the invidual mobile phone numbers and with the PIN 4711. The player’s account could be topped up by a self-devised 15-digit credit card number, the validity of which was checked and authorised by the card authorisation number 452. After dialling-in to the system the player could operate the following functions by voicecommand: • The placing of a football bet on a given game by specification of the type of bet and the stake • Fixture list queries • Queries on groups and their participants • Queries on and topping-up of the player’s account • Confirmation of bets (including stake and odds) by SMS • Topping-up of the plaver’s account by credit card – albeit without „real“ credit card validation. In addition to international cross-industry businesses such as Nortel, established specialists such as Sikom, Sympalog and Voice Robots took part in the contest, as well as the innovative newcomer Auratech. Even though only demo applications could be made in the short period of time availible to the participants, their respective applications showed an impressively high level of functionality. © 2006 Hambach & Hambach Rechtsanwälte 12 Betting Law News 01 | 2006 Hambach & Hambach Rechtsanwälte If betting providers are able to automate their service through speech technology, this opens up new possibilities as regards the size of its accessible target market, as well as its profit margins, which through a lower cost automated solution are clearly greater than if calls were taken by a call centre. The demo applications show that technology has fully developed for the recognition, understanding and processing of human statements, i.e. the recognition of speech and the synthetic rendering of answers in convincing and natural quality. The times of tedious key and voice commands are over. Whereas now people are used to other voice-operated information portals where the input of data is still done on a telephone keypad, the said applications were even able to recognise whispers and dialects without error. The voice recognition programme was able to fautlessly interpret the freely spoken phrase „I would like to put 20 euros on Argentina“ as a bet of 20 euros on a victory for Argentina in their next game. In this way, it would be possible to retrieve information from a given fixture list or make a query as to odds or the topping-up of the gamer’s account by credit card by voice control. The applications shown above mirror exactly the demands of betting providers for automized means of taking bets. From this, new business possibilites arise for betting providers: a marketable system can already be developed and put into practice for less than €200 000. According to recent studies, after the system is set up the average cost of each transaction is 50ct. Good speech computers complete over 90% of transactions: according to recent studies, customer acceptance is over 70%. Evidence has also show that older people in particular find it easier to operate speaking applications rather than for example online applications. For the implementation of a good speech programme important static announcements are spoken by a professional announcer on the basis of a storyboard (Welcome, System Information, Description of the Service). Dynamic content such as stakes or results are converted through speech synthesis. The application relies on the same technology and gateways (back-ends) with which the stakes, payments and statistics for the website are updated. In this way, speech dialog systems quickly allow all prepared dialogs to be managed and peak loads to be processed efficiently. They can even send an SMS reminder a few minutes before the opening-whistle of a football game including a call back number, thereby also encouraging spontaneous betting. The phrases, recorded synthetically can be varied to suit different times of day, regular customers or customer ages and can be modified to an individual, personalised sales approach. The systems are highly interactive and allow the betting customers to „jump“ to other menu areas. Regular customers can also be directly offered their preferred bets based on their betting history. Sports stars or celebrities could also speech in these © 2006 Hambach & Hambach Rechtsanwälte 13 Betting Law News 01 | 2006 Hambach & Hambach Rechtsanwälte sophisticated audio worlds (such as in the voice-operated Lukas Podolski lottery of 1. FC Köln), which offer the customer with an intensive world of experience in a highly entertaining style, unrivalled low costs and an expansive service. The biggest advantage however is that betting services are accessible from the outset. Television broadcasters also want to have a share in this newly aroused passion for mobile gambling - in good time for this year’s World Cup. The large private stations: Pro Sieben, Sat.1 and RTL already have ideas for interactive betting services in the pipeline. The mobile phone provides the interactive means of customer response to the advertised betting. The Munich company EM.TV with the specialist sports channel DSF, as well as the pay-per-view channel Premiere have their sights set on the sports enthusiasts in their audience. „We consider the area of sports betting as an attractive one with high turnover and rate return potential“, says Werner Klatten, Managing Director of EMTV. According to the Director of Premiere, Georg Kofler, the pay-per-view channel Premiere Win should „create a top player in the betting business“ – and should provide an annual turnover of €1 billion euros until 2008. This could generate between 5 and 15% commission for the broadcaster. „There should be no intellectual barriers to entry for the audience“, says Wolfgang Reiter, who developed the betting chanel for Premiere. „As long as the programme is entertaining, it is completely irrelevant whether one rolls a lottery ball or lets horses run round a race-course“. It must also be quick and simple: the betting stake is conveyed on the telephone or by the click of a mouse. According to the broadcaster’s information, already since the channel first went live 50 000 Premiere customers have got up and registered. The turnover has been three to four times what was expected. At the beginning of the second quarter of 2006 there should be the first lapse in profits. For the World Cup 2006, the Munich pay-per-view channel wants to treat its customers to interactive technology, which allows betting at the push of a button and even by remote control at home. Interactive TV channels elsewhere in Europe serve as an example to the German broadcasters. The French betting provider PMU, for instance, had a turnover of almost €80m in 2004 with its interactive TV betting service. Skybet, the gambling daughter of the british broadcaster BSkyB, last year generated € 380m through betting. © 2006 Hambach & Hambach Rechtsanwälte 14 Betting Law News 01 | 2006 Hambach & Hambach Rechtsanwälte In light of the expected demise of the State monopoly in April, established betting providers and television broadcasters will offer betting by telephone to really top-off their product ranges and to expand their target audience. Here it must be noted that betting by telephone – including through the use of speaking computers – is subject to the E-Commerce regulations. That means in particular that the extensive informational duties must be observed, which is regulated in the Distance Selling Law. The automated reading-out of text such as general business terms and conditions presents no techincal difficulties and can be altered to conform with consumer law. It is essential that providers alter their service to conform with the law, as general business terms and conditions are not included in the betting contract, this risks not only prelitigation threats from competitors but also that the body of rules and regulations drafted by the provider becomes invalid. That could become expensive, for instance if the provider were to have made specific provision for particular types of game. These provisions would then be invalid and not applicable in case of a legal dispute. If the general business terms and conditions of the provider gave some clarity, uncertainty would prevail in its place on the issue of betting by phone. It is easy to envisage the financial risks connected with this. © 2006 Hambach & Hambach Rechtsanwälte 15 Betting Law News 01 | 2006 5. Hambach & Hambach Rechtsanwälte OLG of Brandenburg substantiates requirements for data protection obligation By RA Dr. Wulf Hambach and RA Dr. Hendrik Schöttle, Hambach & Hambach People active in E-Commerce are as a rule subject to the German Act on Protection of Data in Telecommunication Services (TDDSG), a body of rules targeted specifically to telecommunication services which, among other things, include homepages or mobile services. In certain cases – for instance for the transmission of advertising in the form of a newsletter – the TDDSG only allows the collection of data if the person concerned has given his consent. The question how such a consent in the sense of the TDDSG would have to be designed, has so far been unclear. A decision by the OLG (Higher Regional Court) of Brandenburg has now thrown some light on the subject (Judgement of 11.01.2006, ref. 12 O 287/04). It had to decide on the practise for consent used by the online auction house eBay. A consumer protection association had objected to the implementation of data protection provisions by eBay and filed a law suit. Among other topics, the case concerned a clause in which eBay reserves the right to send an advertising newsletter to the customers and also to present them with custom-tailored offers on the page "my eBay". Consent: double confirmation required The TDDSG provides for the consent to only be given by an unambiguous and conscious act (comp. § 4 Section 2 No. 1 TDDSG). The court confirmed the view taken by legal literature that this requires a repeated confirmation of the transmission instruction. In other words: it is not sufficient to just tick a checkbox, the user must confirm his consent a second time. The practise used by eBay and objected to by the plaintiff, to show an additional control box with the text "I accept and agree" was regarded as admissible by the court. It held that this made it clear to the user that the second instruction was a confirmation of the first instruction. Data protection declaration: pop-up window and scrolling admissible The obligation to inform the user of the processing of his data in the so-called data protection declaration (comp. § 4 Section 1 TDDSG) also has been implemented correctly by eBay according to the view held by the court. It thought it admissible to display the text in a pop-up window containing five lines and to let the user scroll through the text; the court at least considers the "user with average knowledge" to be capable of recognising the importance and functionality of a scrollbar. As the user, in the case in hand, still had the possibility of printing out the regulations, the court held the implementation of the data protection declaration to be sufficient as a whole. © 2006 Hambach & Hambach Rechtsanwälte 16 Betting Law News 01 | 2006 Hambach & Hambach Rechtsanwälte Prohibition of coupling: no monopoly position at a market share of 76% A further question considered by the court was a possible violation of the so-called prohibition of coupling. The plaintiff had objected to eBay only admitting the registration of new users with a simultaneous consent to the reception of the advertising newsletter; a registration without the corresponding consent was not possible. § 3 Section 4 TDDSG prohibits a practise like that, if the user has no other access opportunity to such offers. This regulation is to be applied, according to the view taken by legal literature – and also by the OLG of Brandenburg – if the provider holds a monopoly position. The OLG of Brandenburg has now given figures for when this is assumed to be the case. The judges held that a market share of 76% at any rate does not support the assumption of a monopoly position. All in all, the decision by the OLG of Brandenburg takes a stand on a variety of questions from the area of data protection in telecommunication services. It is satisfying to know that here for once the detailed implementation was made the subject of examination by a court and was positively confirmed. © 2006 Hambach & Hambach Rechtsanwälte 17 Betting Law News 01 | 2006 6. Hambach & Hambach Rechtsanwälte European Commissioner plans immediate Steps to open Gambling Markets By RA Dr. Wulf Hambach and Sarah Madden, Hambach & Hambach As a result of the plenary vote on the 1st reading of the EU Framework Services Directive, which took place in the European Parliament on the 16th of February 2006, gambling is no longer contained in the Directive. It is now more likely that countries will be forced to recognize that current European law already permits cross-border gambling within the EU, ultimately through European Court of Justice rulings and infringement proceedings by the Commission. When it was initiated in January 2004, the scope of the Services Directive did cover gambling but with an ultimate implementation date of 2010. The current proposal may be a somewhat “watered down” version of the original Directive but the reality of reaching a broad consensus had to be faced – this consensus now excludes the service of gambling from the scope of the Directive. The Commission will now take on board amendments adopted by the European Parliament by a large majority and will hopefully come forward with a revised proposal, with a view to a common position from Council by the end of April. However, the Commission does consider this date optimistic. At a talk on globalization by EU Commissioner for Internal Market and Services Charlie McCreevy in Dublin on the 23rd of February 2006, the Commissioner said that the Directive, as initiated, was never going to go through. In its present form, it will take significant time for the Directive to become law and some risk remains that it may not. It is, however, as suggested in Betting Law News 07/05, highly unlikely that gambling will come back within its scope. In both the EU sub-committees and the working groups, nearly every member state wanted gambling excluded. As a result of this, McCreevy is fairly certain that gambling will not be in the next proposal nor will it come within its scope in 2010. There have been a series of gambling judgments by the European Court of Justice concerning gambling, the most renowned of which is Gambelli. With the exception of Ireland and the United Kingdom, there are major restrictions in the gambling sectors throughout Europe – Most member states are subject to a state monopoly on gambling services. As a result of the ECJ decisions, member states are entitled on public policy grounds to restrict gambling but can now no longer promote their services while preventing anyone else accessing their markets. © 2006 Hambach & Hambach Rechtsanwälte 18 Betting Law News 01 | 2006 Hambach & Hambach Rechtsanwälte As reported in Betting Law News 06/05 and 07/05, the Commission has received a number of infringement complaints against member states using restrictive policies on gambling to shut off their markets (Sweden, Hungary, Finland, Denmark, the Netherlands, Germany and others). Commissioner McCreevy has stated that the implementation of infringement proceedings against those non-compliant member states is imminent. This is consistent with the view previously expressed by Swedish MP Christofer Fjellner that the Commission will have no other choice than to launch these infringement proceedings following the Parliament vote to exclude gambling from the Framework Services Directive. Although the exclusion of gambling from the Services Directive superficially appears to support restrictive practices by state monopolies, in practice, it is likely to result in more immediate regulation of the industry through direct action from the Commission. © 2006 Hambach & Hambach Rechtsanwälte 19 Betting Law News Hambach & Hambach 01 | 2006 7. Rechtsanwälte Our information Dr. Wulf Hambach will speak at the following up-coming conferences: 13. April 2006/London Remote Gambling Regulatory Intensive (World Online Gambling Report) 27. April 2006/Munich (Bayerischer Hof) The case for gambling de-regulation in Europe (GMM Business Solution) 29 - 30 May 2006/Bonn Sportwetten und Glücksspiele – ein neuer Markt formiert sich (Euroforum) 31st May – 1st June 2006/Brussels 2nd Annual European Gambling Briefing (ATE Online) 21st – 23st June 2006 - Laibach Conference - International Masters of Gamling Lawyers (IMGL) If you have any further questions, please do not hesistate to contact the office of Hambach & Hambach We are pleased to welcome the business consultant Jens Leinert ([email protected]) to Betting Law news as a guest commentator on business matters. © 2006 Hambach & Hambach Rechtsanwälte 20 Betting Law News 01 | 2006 Hambach & Hambach Rechtsanwälte The executive consultant Dipl. Kaufman. Jens Leinert has been one of the „institutions“ in German online business since 1996, working as a consultant, an executive and a specialist in online payment systems. Leinert is the author of the market report „Online Gambling 2005“ and has made a name for himself with numerous talks and articles in the international media and at expert conventions as an industry expert for online entertainment, gaming and payment. © 2006 Hambach & Hambach Rechtsanwälte 21 Betting Law News 01 | 2006 8. Hambach & Hambach Rechtsanwälte Editorial Details Betting Law News offers gratuitous information on current events in European and international gaming law. Hambach & Hambach do not accept any liability for the accuracy of the contents of Betting Law News. Please note that Betting Law News is only meant to serve as a source of information and can under no circumstances replace legal advice by a lawyer. Re-printing (second publishing) is only admitted in case of gratuitous dissemination and under the condition of quoting the source and address information (on the internet with the additional requirement of a link). Please also provide us with a specimen copy. The Betting Law Newsletter has been registered with the national ISSN centre for Germany (ISSN 18617441). Responsible editor: RA Dr. Wulf Hambach Editors: RA Dr. Wulf Hambach RA Claus Hambach RA Andreas Gericke RA Dr. Hendrik Schöttle Sarah Madden Guest commentators: RA Justin Franssen Jens Leinert Haimhauser Str. 1 D-80802 München Tel.: +49 89 389975-50 Fax: +49 89 389975-60 E-Mail: [email protected] www.betting-law.com © 2006 Hambach & Hambach Rechtsanwälte 22