A swift exile
The city of Bremen in northern Germany will soon close all of its betting shops due to the interior secretary’s suspicion of money laundering.
At its core, this is about checking the reliability of these operators.”?
“At its core, this is about checking the reliability of these operators,” Bremen’s senator for interior affairs, Ulrich M?urer, said to the Weser-Kurier newspaper. “We also want to guarantee that no money from dodgy businesses like drug dealing or human trafficking is being laundered here and thus flows into legal money cycles.”
A Wednesday announcement revealed that Bremen, Germany’s smallest city-state, has already rejected 32 betting license applications. As a result, any bets placed at those facilities after the expiration of the current licenses would be illegal. Affected stores have until August 5 to challenge the decision legally
Legal framework
Germany has been plagued by many betting scandals; the issue is not unique to Bremen, but it is quite prevalent.
Deutschland already has a unique betting market, with restrictions enforced by state and federal governments. In 2019, the finance ministry and federal police revealed that criminals were laundering money via betting parlors, if not investing and purchasing them directly. In 2020, a German financial service was found to have funneled money for an online casino that laundered for ’Ndrangheta, a powerful European crime organization.
The 2021 State Treaty on Gambling, known as Der Glücksspielneuregulierungsstaatsvertrag (GlüNeuRStV), legalized online gaming but also established a regulatory body. The rapid growth of the market has caused many problems to slip through the cracks, however.
German investigators warned that gambling events at local establishments are frequently “simulated”
German investigators warned that gambling events at local establishments are frequently “simulated,” and the prize money comes from criminal activities such as drug dealing. Betting shops are often owned by smaller businesses that purchase licenses from bigger entities, making them an easy target.
The low-level system of entry into the gaming market is unlike that of nearby England, which entrusts gambling giants such as Flutter and William Hill to run its betting centers.
Challenging the money laundering
Contesting operators will have to provide paperwork detailing their initial capital through documents such as loan agreements with banks. Since April, Bremen authorities asked four large, local betting companies about the origin of their startup funds, usually around €120,000 ($121,946). Rose Gerdts-Schiffler, a Bremen senate spokesperson, confirmed that none of the companies could provide the necessary paperwork.?
Gerdts-Schiffler also shared that one establishment’s proximity to a school, not its lack of documentation, was responsible for its license being revoked.
other states in Germany are looking with close interest at what we are achieving”
“Other states in Germany are looking with close interest at what we are achieving by taking this step,” said Gerdts-Schiffler. “If we are successful, I expect many of them will follow suit.”
One particularly notable figure, Germany’s Sports Betting Association president Mathias Dahms, opposes the decision. Dahms called Bremen’s initiative “arbitrary, legally questionable and completely out of proportion, motivated purely by political goals.”
