An online article in the Financial Times indicates that a courtroom duel is in the offing between Betfair and Germany,

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Betfair, a leading online gaming and poker company, is reportedly unhappy with the proposed legislation that Germany seeks to pass. The new legislation is Germany’s response to a verdict passed last year by the European Court of Justice. The court had found that the existing regulation in the country amounted to a monopoly and a violation of European Union treaty guidelines.

While permitting member nations to pass country specific laws designed to protect their citizens, the EU treaties prohibit these laws from restricting competition or creating monopolies that benefit local companies.

Of the sixteen states that comprise Germany, one has drafted legislation that seems to have satisfied foreign online companies. The other fifteen have reworked their legislation and are seeking to pass them as early as December 15. Betfair contends that these proposed new laws still do not comply with the specific points raised by the European Commission and that in fact they would facilitate rather than prohibit a German monopoly. The company believes that these proposed laws would prevent it from competing in a fair manner for players in Germany.

Under the new proposals, the number of companies that can operate in the country will be increased from seven to twenty and the tax rate would be lowered. Germany is timing the tabling of these proposals before the Brussels based European Commission in such a way that the states can pass the laws in mid-December. Betfair is saying that these proposals contain nothing new and that they would be still be in violation of European Union law.

Some European countries already have strict laws governing online gambling operations by foreign companies on their territory while others have practically nationalized the operations. For instance, in France and Italy the laws dictate that online gambling operations must cater only to players from these countries and players from outside cannot play on these sites. In Sweden, all online gambling options are regulated by a state owned company.

The country specific entities created to comply with these laws all rank high in the list of the largest online poker operations across the industry.

The fate of the new German proposals will be known in two weeks. If they go through in their current form they will become law in the beginning of 2012.

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