14 Bremen betting shops to remain closed

The city-state had closed all betting shops under a review of money laundering measures.

Germany.- The Chancellery of Bremen has decided that 14 betting offices will remain close amid a review of money laundering measures. The city-state’s senator for internal affairs, Ulrich Mäurer, had ordered all 32 betting shops to close in July after rejecting their applications for new licences.

Mäurer had ordered an investigation into whether the betting shops had complied with changes to rules on financial reporting. He argued that it was not clear where the owners had obtained the capital to run their businesses.

The sports betting trade association DSMV had criticised the decision as politically motivated. It affected several small businesses as well as franchises of HappyBet, Tipico, Tipwin and XTiP.

The Chancellery has now provided an update, reporting that more than half of the beating shops had been allowed to return to business, but 14 will remain closed. The investigation uncovered no evidence of money laundering but eight betting shops will be investigated for “concerns about reliability” because managers had criminal records.

The other six have been put under review for breaching rules that set a minimum distance of 250m between betting shops and healthcare centres of places of study.

Mäurer said: “The very labour-intensive review was worthwhile. Almost all operators have so far been able to demonstrate the legal origin of the funds. However, the fact that we have discovered dubious people responsible for some should give food for thought. I am sure that our example will also set a precedent in other federal states.

“The closures of several weeks at the operators, who are now allowed to open again, could have been avoided if their evidence had been submitted in good time. Despite repeated requests from the authorities, this did not happen. So the closures are not to be blamed on the regulatory office.”

Meanwhile, the Federal Administrative Court has ruled that German municipalities cannot levy a betting shop tax. The decision comes after betting shops in the city of Dortmund took legal action over a municipal betting tax introduced in 2014.

The tax, which was intended to be passed on to customers, was initially calculated according to the physical size of the area where bets were processed and monitored in each betting shop. However, the Federal Administrative Court ruled in 2017 that such a calculation could not be used. Dortmund then adopted a flat 3 per cent tax on stakes (the federal government already taxes stakes at 5 per cent).

However, betting shops said sports betting should be treated similarly to measures defined in the Lottery Act that do not allow for separate municipal and federal taxes. The Münster Higher Administrative Court allowed for an appeal on those grounds but the process was suspended to await a decision on the legality of the municipal tax from the Constitutional Court. The Constitutional Court finally concluded that the municipal tax was indeed invalid.