German State Bremen Closing All Betting Shops

August 1, 2022
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Betting shops in the German city-state of Bremen are targeted for closure after the interior senator claimed they were fronts for money laundering.

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Betting shops in the German city-state of Bremen are targeted for closure after the interior senator claimed they were fronts for crime and money laundering.

Breman Senator for the Interior, Ulrich Mäurer, said all 34 applications to operate betting shops have been rejected as “none of the operators could or wanted to explain their financial background.”

“With the receipt of the rejection notices, brokering in the sports betting offices immediately constitutes illegal gambling,” according to Mäurer's announcement made on Wednesday (July 27).

If the applicants do not provide the information by today (August 1), they have been told they must stop operating.

“Basically, it's about checking the reliability of these operators. We also want to ensure that no money from shady deals such as drug or human trafficking is laundered here and can flow into the legal money cycle in this way,” Mäurer said.

Bremen officials fully expect there will be a legal pushback from the affected operators.

Four operators in Tipico, HAPPYBET, Tipwin and XTiP applied for permission to run the betting shops, 24 of which were previously “only legally tolerated”, according to Mäurer, with a further eight planned to be opened.

However, a spokesperson for TIPICO said the impression given by Bremen politicians is “just plain wrong”.

“Within the framework of the current permit procedures, we are in a constant exchange with the authorities in order to fulfil all requirements in the best possible way. In the process, we have already launched several attempts to answer the authority's question about the origin of funds in a transparent manner,” TIPICO told VIXIO GamblingCompliance.

However, the operator claims it has been unable to find a form of presentation that satisfies the authority and “at the same time makes sense and is meaningful from the point of view of corporate accounting.”

TIPICO is continuing to work on a proposal for a solution that takes all these aspects into account, adding that “judicial clarification” could be sought “if necessary.”

Attorney Martin Arendts believes the main problem of the Interstate Treaty on Gambling, which further liberalises sports betting, is “it is not based on a real common understanding of the 16 German states, but still is a kind of formulaic compromise.”

“While some states wanted to open up the betting market already some years ago, like Hesse, other states still want to keep the monopoly and are against an opening of the betting market, like Bremen, Hamburg and Berlin,” Arendts told VIXIO GamblingCompliance.

All of the current applicants to operate betting shops have to provide information on where the money they used to set up their businesses comes from due to an amendment Bremen approved to its Gambling Act in 2021.

Only the implementing act of Bremen requires proof of funds with regard to betting shops which Arendts claims does not make much sense with regard to AML regulations as the operators are regulated anyway.

“From my point of view, the announcement of Bremen's Senator for the Interior to close all betting shops is political theatre. There is no factual and no legal basis,” Arendts said.

The German Sports Betting Association (DSWV) quickly called the Bremen senator’s actions “politically motivated” and stated the closures would be “illegal.”

DSWV President Mathias Dahms rejected Mäurer’s announcement, adding that members of the trade group “have nationwide permits as organizers of sports betting.”

“The reliability of the providers was put through their paces and, of course, the legal origin of their equipment has also been proven.”

DSWV claims that “extensive, meaningful documents” have also been presented to the Bremen interior office regarding the betting shops and their financial resources.

“Money laundering experts have confirmed the evidence. As usual, the authorities did not ask any questions about the documents submitted. Instead, the applications were rejected and closure was threatened,” according to DSWV.

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