Administrative Courts in Frankfurt and Wiesbaden have both stopped the issue of sports betting licenses.
In Frankfurt am Main, the Administrative Court has stopped granting such to selected candidates by an order on the 27th of May this year. Alas, the Hessian Ministry of the Interior and Sport has bound over to the decision and has still kept the licensing procedure open.
In the Hessen capital, Wiesbaden, the 5th Chamber of the Administrative Court, postponed the announced issue of sports betting licenses of 20 selected candidates by an order on the 5th May 2015 which regarded an urgent application of an Austrian sports betting provider. The concessions of the 20 selected candidates have been brought down to an awaited decision in legal proceedings.
In the Frankfurt case, the applicant is a resident and a provider who was rejected from a pool of another twenty applicants, due to not reaching the required score for the concession. Such score is dependent on multiple values and criteria which have been chosen by an academic body specialized in gambling and whose score is applied proportionally between the applicants according to their characteristics.
The applicant appealed to the competent administrative court in Frankfurt am Main against the decision and this applied by way of interim relief, the granting of the license to the twenty selected sports betting operators whose concession process has been paused, due to the decision.
The process was published in the Official Journal of the European Union of September 2012, with the intention to award up to twenty sports betting licenses and further limited by the time-bar; having to be announced by the 30th of June of 2019. According to the publication, the licensing procedure should be carried in two stages. First, a selection should be made according to several criteria taken from the State Treaty on gaming; different groups are awarded different amount of points per criteria. Examples of criteria include ensuring the objectives for the State Treaty on gaming and evidence of making financial performance.
In this case the applicant argued that they were made aware of the entire licensing procedure so that the selection decision is transparent and legal. By contrast, the defendant believes that eligibility criteria were still allowed to be concretized during the process.
In the summary proceedings, the Trial Court determined that the claim of the inferior competitor was injured when it comes to the elements of transparent and non-discriminatory procedures. These are seen to follow directly from the State Treaty on gaming, which is, in turn, derived from the EU Treaty’s principle of transparency. The Court considers that neither from the tender, nor from the legal text can it be sufficiently clear which requirements the applicant would have to meet. The main criteria for both the minimum conditions and for the selection decision should clear and announced unambiguously in advance in order to operators to assess the requirements and offer the best possible under those circumstances.
Similarly, the administrative court in Wiesbaden noted the lack of transparency on the 5th of May 2015, and consequently prevented the concessions to other selected candidates.
In particular, the second chamber of the Administrative Court Frankfurt am Main lays down the concern, that the State of Hesse sees itself bound to the vote of the gambling College. Originally, this decision-making authority was required only to authorise regulatory authorities and while the vote could possibly constitute an internal administrative measure, this would not be part of the binding administrative procedure. Due to such an error in administrative procedure the applicant had a right to argue that the first concessions, his competitors, should not be awarded the concession. Although the twenty betting concessionaires have had a considerable interest in obtaining and using their intended concessions for two years now, a, however, the principle of transparent and non-discriminatory administrative procedure outweighs such interest.
In Wiesbaden the Administrative Court has stopped the announced issuance of 20 sports betting licenses to selected candidates. Here is a brief outline of what is supposed to be the procedure which leads to owning a license.
In Germany, gambling can only be operated with the permission of the competent authority. The Gambling Treaty provides that for the span of 7 years, as from July 2012, sports betting may be organized on a trial basis through a concession. A total of 20 concessions are to be issued nationwide and the state of Hesse is responsible for the granting such licenses in uniform procedure.
On the 8th of August 2012 the tender process leading to the concession was made public. The process was carried out in two successive phases. In the 1st stage the conditions set out in the invitation to tender had to be met. In the 2nd stage, candidates were given the opportunity to supplement their application.
Out of the original 73 applicants for the concession only 35 candidates remained. On the second of September 2014, they received the message that 20 selected candidates should be awarded the licenses on the 18th day of the same month. The applicants had been informed that all the details on the minimum requirements and the selection of concessionaires would only be reported if they had qualified for the 2nd stage.
The design of the selection process is contrary to the requirements, and thus a restriction on the freedom to provide services. It is only for the first stage of the process that the tender requirements and references are listed. On the second level, 5 concepts were called for the fulfillment of minimum requirements on the 2nd level, which would have to be submitted without and detail on the requirements thereto, with the objective of gradually reducing the number of applicants. The requirement of 5 concepts did not appear in the gambling treaty itself, which only contained procedural provisions for the selection process.
In view of the ongoing situation and the fact that the provisional license is limited to a 7 years experimental phase, it would be a requirement for justice to have time periods outlined in advance in order to keep the administrative procedures within a reasonable time frame. In the current situation were such lacks, candidates could not be able to take into account the time involved in such a process.
A total of 600 inquiries were launched from candidates asking on a clarification on the requirements catalog for the second stage. The audit process and the decision-making have remained opaque. Questions like who the professionals who composed the audit team were and on which qualifications they were chosen by, remain unanswered.
The decisions in gambling College, whose decisions are binding for the state of Hessen, were also not transparent and flawed. Although the decisions of this body would be located in the corresponding minutes of meetings, however, one could find no justification for their decisions and only the results of votes.
Moreover, could authorities who act according to the Hessian law have their decision be ultimately left to a committee made up of representatives of all the provinces and whose decisions is binding solely by 2/3 majority, including the voice of the Hessian member? This means the selection decision for the allocation of 20 sports betting licenses had not been taken unanimously.
In addition to the implementing deficiencies there exist other conceptual shortcomings of the concession process. The date relied on to justify the monopoly, and now to justify only limited concession is claimed to be in the public interest in for the combating of gambling addiction. Moreover, the decision of the second stage which has been sent to the applicants, do not contain information for the purpose of combating the black market rendering it completely opaque and unpredictable.