Schleswig-Holstein Licenses Under Threat

Just one month after seven iGaming operators were awarded a license in the German state of Schleswig-Holstein, plans from a new government could lead to the dissolution of the regulated gaming market.
Three of Germany’s political parties, the Social Democrats, Green Party and South Schleswig Voter Federation, have formed a coalition to assume control of the state after a close election victory over Chancellor Angela Merkel’s Christian Democrats (CDU) on May 6th. The three parties intend to rejoin the gambling treaty of the Germany’s other 15 Länder and look for options to dispose of the gaming licenses that were issued without being liable for compensating the seven existing license holders.
Betfair, myBet, and Die NordwestLotto became the first sites to receive a gaming license in Schleswig-Holstein on May 3rd. Two weeks ago, licenses were issued to bwin.party, bet365, bet-at-home.com, and Tipico to make seven total legal operators in the state.
Klaus Schlie, interior minister for Schleswig-Holstein, granted the license under an EU-backed law that permitted the firms to offer sports-betting services until license renewal proceedings in May 2018. Licenses for poker and casino games were intended to be awarded in the coming weeks as more than 40 iGaming companies awaited word of their application. Change in political power appears to have halted any chance at further licenses being issued at this time.
The new government coalition will need the support of the state general assembly in order to repeal the gambling law. Additionally, the coalition has to be official sworn in by parliament making it apparent that their plans for action regarding the gaming law will take some time.
One hurdle facing the coalition is that the existing seven operators will almost certainly take legal action against the state if their licenses are dissolved. The new government could be held liable for potential lost revenues if their reforms prevent license holders from operating in the state.
Despite the news, the share price of German-reliant bwin.party (BPTY.L) was up £6.20 or 5.12% today on a day when the FTSE 100 index rose 2.36%.
One license holder has already indicated disregard towards the new coalition’s plans. Mathias Dahms, CEO of myBet Holding, said his company would continue to expand its German business as a result of its license approval last month. He suggested the coalition’s only victory was to prevent the further issuing of licenses and that their existing license will remain valid.