As a result of the decision, which was confirmed by state secretary Juergen Staupe at a press conference in Dresden this morning, Bwin will be banned from operating and arranging sports bets and advertising in all the 16 German states.
Bwin\’s partner in Germany, Steffen Pfennigwerth, obtained the license 16 years ago when the former East Germany loosened gambling regulations just few days before German reunification. According to a spokeswoman for the online bookmaker, German authorities have tried to revoke the license ever since, but were consistently turned down by courts, lastly in 2001 by the Federal Court of Justice.
It appears the state of Saxony was encouraged by the Constitutional Court ruling which in March this year stated that state gambling monopolies were permissible and state governments could ban private bookmakers pending revision of German betting laws.
Bwin confirmed it will sue and claim damages from the State of Saxony for up to EUR 500 million.
Andrew Lee, analyst at Dresdner Kleinwort, told the Financial Times that Bwin had a strong legal case if the move went ahead.
Arbuthnot Securities remain concerned that a protectionist backlash is not confined to Germany and that Scandinavian countries could be next.
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