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eulogo.jpgEarlier today, the European Union gave formal notices to the countries of Germany and Sweden, challenging them to defend their laws which prohibit foreign online gaming companies from competing fairly in their countries. Both countries have recently enacted laws designed to protect their state-run monopolies from foreign competition in an effort to help the monopolies continue to amass large profits from the many German and Swedish citizens who participate in online gaming activities. These laws, which are prohibiting foreign competition, are in violation of the EU Treaty by blocking international trade in the market sector.

Germany and Sweden now have two months to respond to the formal notices, either by proving that their laws are not in violation of the EU Treaty, or by amending their laws so that they are in compliance with the EU Treaty. If neither of these actions occurs, then the offending country will be brought before the European Court of Justice to face penalties and fines if judgment is ruled against them.

Germany received a formal notice because of the German Interstate Treaty, which went into effect on January 1, and in effect bans almost all forms of online gambling and also prohibits the processing of online payments. The German Interstate Treaty is not actually a national law, but is instead a law that is agreed upon by the different states within the German republic and is ratified by all sixteen German States. It has the effects of a law, but is not officially a law.

Sweden received their formal notice because of their laws which place an inordinate amount of restrictions upon foreign online gaming companies that wish to do business with Swedish citizens. In Sweden, all poker games, both on and offline, are offered by the national government, with Svenska Spel offering online poker as the state-run online poker room. Svenska Spel, when translated directly from Swedish, means Swedish Game. In the formal notice, the EU says that the Swedish government cannot ban foreign online gaming companies from offering poker to Swedish citizens when the Swedish government is at the same time promoting poker through the state-run online poker room.

Tue European Gambling and Betting Association was quick to applaud the EU’s actions, calling them decisive and a clear statement that the EU will take notice of countries that violate the EU Treaty and bring them to justice. The EGBA is a collection of eight different online gaming companies. In addition to the EGBA, several more gaming companies announced their approval of the EU’s actions, appreciative that the EU will not let Germany and Sweden get away with banning them from offering services to German and Swedish citizens.

Starting now, Germany and Sweden have two months in which to comply with the EU Treaty or start planning their defense for when they are brought before the European Court of Justice. Online gaming companies across the world are watching to see how this turns out.

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