A top German lawyer has lambasted the proposed state treaty that seeks to effectively put a stop to online gambling in the country.
Last December, Germany presented its new draft state treaty on gambling. If passed, the paper, which contains measures similar to the UIGEA in the US, will oblige internet service providers and banks to ban gambling websites and any financial transactions pertaining to online gaming.
Speaking at the BetMarkets global sports betting conference in Vienna earlier this week, Konrad Miller, attorney-at-law for Hambach and Hambach, attacked the proposal on the grounds that it would not only be extremely costly, but also nearly impossible for both service providers and financial institutions to facilitate a complete ban.
"The passage as it stands reads quite easily, but when it comes to the implementation of respective prohibition orders, several problems emerge," he said. "The first problem is that these orders are extremely easy to evade."
Miller drew attention to the fact that the normal way for users to access a betting site is to connect to an internet service provider, which then transmits data back and forth between the content provider where the website is hosted.
Under the terms of the state treaty draft, the normal route between user and gambling sites would be obstructed.
Due to the decentralised structure of the internet, however, there are many ways of evading this block. For example, proxy websites - or so-called anonymisers, such as MegaProxy.com - allow users to circumvent any blocks with just two mouse clicks. Moreover, as long as these proxy sites are situated outside of Germany, then such actions would not be subject to German state laws.
Miller also highlighted the fact that attempting to block the direct path in itself poses a number of problems. For instance, many websites are sometimes listed under scores of different domain names, which are utilised when the site comes under a great deal of traffic. Blocking one website would thus also mean blocking numerous domain names; huge lists would have to be created and updated frequently.
"It cannot be left to the internet providers to do the detective work and find out which websites and domain names to block around the world, because it is not their responsibility," added Miller.
Financial institutions are presented with a host of similar problems. For example, specific codes are tagged onto specific transactions. In the case of gambling transactions, banks receive the code ‘7995.’ While it would seem logical to block all transactions using this code, Miller noted that new numbers can easily be added. In addition, state providers - such as lotteries - would also be blocked, as they also use code 7995 in their online transactions.
"My opinion is that due to the sheer difficulty of blocking sites and transactions - and taking into consideration the suitability and proportionality of such methods - I would say that the proposed ban on online gambling is not the way forward," Miller concluded.
If agreed, the German law will come into effect on January 1, 2008. The European Commission has asked the state to reconsider its proposed ban, as it finds the paper inconsistent with EU law.
