Germany faces new legal action over gaming market

A new German law came into force at the beginning of January 2008 that bans online gaming and betting, except on horse racing. Europe's online gaming industry has condemned the ban on Web gambling as unlawful and urged the Commission, the EU's executive arm, to overturn it.

A source in the gaming industry has said: "The Commission is expected to open a new legal action with a letter of formal notice against Germany over the new law and could well drop the old legal action it started last year."

EU Internal Market Commissioner Charlie McCreevy started a legal action against Germany in 2007 over its gaming laws. He wants to crack down on hurdles to cross-border competition in services, a core part of the 27-country European Union's single market.

The new legal action could end up in the European Court of Justice, where Germany could be fined and forced to change its laws to comply with EU rules. The Commission has complained that Germany failed to notify Brussels properly about the new law.

The European Gaming and Betting Association said the German ban directly contravened EU law on the free movement of services and urged the Commission to take swift action.