Published: August 7, 2023

Operators fail in legal challenge to Baden-Württemberg gambling law

Operators in Baden-Württemberg have failed in a legal challenge to the state's interpretation of the State Treaty on Gambling, which prevents wagering from taking place in the same venue as a casino or gambling hall.

The Baden-Württemberg Constitutional Court ruled on two lawsuits brought by gambling operators in the cities of Karlsruhe and Rastatt. The plaintiffs had argued the ban on betting venues and gaming halls being in the same building violated the constitution.

The suits argued the law did not align with the constitutional guarantees for professional freedom. They also said the law went against the general principle of equality and of effective legal protection.

However, the court rejected these arguments, therefore confirming the separation requirement. According to the decision, betting shops sharing a building with a gaming hall must move premises.

A “justified” encroachment on personal freedom

The decision said the separation requirement’s encroachment on the professional freedom was justified. The court argued this was due to it serving a “reasonable purpose of the common good”.

In support of this decision, the court highlighted the mitigation of gambling addiction as an important public interest goal.

The court said it is “obvious” players should be discouraged from one gambling facility to another in quick succession and therefore “a mixing or accumulation of different gambling offers in one location should therefore be prevented”.

As a result, the court said the burdens the law places on operators are not disproportionate to the benefits of the regulation.

Court says law consistent with principle of equality

The court also ruled the prioritisation of existing gaming halls over sports betting operators is consistent with the constitutional principle of equality. The law mandates that, if a betting shop and arcade are in a building, the sports betting operator must move.

While the court accepted the law indeed treats different operators unequally, it said the requirement did not lead to a violation of the general principle. The Baden-Württemberg court outlined this was due to three practical considerations.

Firstly, the court pointed to the greater need to protect the arcade’s investment over the relatively smaller amounts involved in the newer betting shops.

Additionally, the court underlined that sports betting businesses until recently operated without a licence, which was at the company’s own risk.

Finally, it said the preference for gambling halls was a “transitional” arrangement. In future cases, whichever operator was there first would have priority, no matter the offering.

The court added that by focusing on the risk created by having different gambling verticals operate in a building, the state parliament is operating within the scope of the law.

Law does not violate legal protection guarantee

The court ruled the final constitutional complaint, the legal protection guarantee, did not violate the law.

The operators had argued the decision to prioritise arcades meant permits granted later should favour the displaced betting shops in order to make sure they are being legally protected. The court rejected this, arguing that to do so would be overturned in subsequent lawsuits.

© Public Gaming Research Institute. All rights reserved.