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The UK’s vote to leave the European Union in a so-called Brexit Referendum might also impact companies that provide gambling services in Germany.
This is an article from my colleagues Michael Stulz-Herrnstadt and Christoph Engelmann, I hope you will enjoy it!
Three of the main consequences of Brexit for gambling companies might be:
- Companies applying for a German gambling license need a registered office in a member state of the European Union or a state that is a party to the Treaty on the European Economic Area. The UK, Gibraltar and the Isle of Man might not fulfill this requirement anymore after an exit depending on the content of the contracts they will negotiate with the EU in the future. So it might be necessary to move the registered office to another EU country.
- Gambling companies with licenses from the UK, Gibraltar and/or the Isle of Man might not be able to refer to the single market and the EU’s freedom to provide services any more if those states are not able to negotiate participation at the single market with the EU. This becomes relevant in court proceedings where EU licensed gambling companies argue that they are allowed to operate in Germany with the non-German but EU license.
- In the event of exit companies that collect sporting bets on behalf of UK-licensed operators in Germany will not be able to defend their business with the recent ECJ decision that ruled that EU law may preclude the imposition of penalties in respect of the unauthorised cross-border intermediation of sporting bets carried out in Germany. One strategy against those impacts (2. and 3.) might be to switch from a UK or Gibraltar license to a license from another EU country.
There is still time to look out for the possible changes and adapt the business accordingly in the view of brexit. For the moment EU law remains valid and enforceable in the UK and there is no immediate loss of protection. There will be a two year period to negotiate the terms of brexit which starts from the date the UK Government officially notifies the EU of its intention to leave.
The negotiations need to be completed within two years, although this period can be extended if the negotiations on brexit are on-going and if all 28 EU member states agree. We will continue to post updates on developments in this matter here as they arise.
