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Germany – Merkur hopeful of positive ruling following distance violation with rival in Osnabrück

By - 20 May 2021

The Merkur Casino subsidiary in Osnabrück, in the German state of Lower Saxony, has been told it infringes on new laws on minimum distance between competing arcades and a general education school.

The conflict of distance is with a gaming facility owned by a competitor. The distance between the arcades is less than 100 meters, so selection was necessary. Since the Merkur casino branch is 11.1 meters closer to a general education school than the competitor’s facility, it was refused permission by the competent authority. Merkur immediately launched interim legal protection proceedings and applied for the toleration of the continued operation of the branch concerned until the final decision in the main proceedings. This application was granted by the Osnabrück Administrative Court. New laws requiring a minimum distance of 100 meters between individual venues also came into force on June 1, 2020.

Tassia Giannopoulos, Deputy Head of the Legal Department of Gaming Operations at Merkur Casino, said: “The aforementioned location of our Merkur Casino branch in Osnabrück has been operated without interruption since 1996 and should have closed due to the refusal notice of the authorities on February 1, 2021.”

The resolution states literally: “The selection criterion does not, however, appear constitutionally proportionate. According to the Chamber, the standardized selection criterion of the distance to general education schools is not materially compatible with the applicant’s freedom of occupation under Article 12 (1) of the Basic Law ”. This means that the criterion of the distance to general education schools is in itself, in the opinion of the Chamber, suitable for making a choice between competing gambling halls. However, it considers the effects of the selection criteria to be disproportionate, especially in the case of very narrow measurement differences, against the background of the consequences for the inferior arcade operator. An overall weighing of further quality features depending on the individual case is not possible due to the selection decision, which is ultimately limited to the local situation.

A decision is expected on April 26, 2021. Merkur maintains a positive outlook for the further course of the proceedings, highlighting that there are serious doubts about the legality of the selection process. Ms Giannopoulos said it cannot be ruled out that the Merkur Casino subsidiary will also be successful in the main proceedings. She sees the future course of the proceedings as positive, even if the present decision is not yet legally binding. The competent authority has lodged a complaint against the decision at the competent Higher Administrative Court in Lüneburg. This and the outcome of the complaint remain to be seen.

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