Germany has bowed to years of criticism about its state betting-monopoly by letting private companies bid for seven national betting licences from 2012, the governors of the country’s 16 federal states said today.

After a meeting in Berlin, Kurt Beck, governor of Rhineland-Palatinate, and Wolfgang Böhmer, his counterpart from Saxony-Anhalt, said the states had agreed to open the betting market for a “pilot phase” of five years.

The northern state of Schleswig-Holstein was the only one of the 16 to withhold an opinion but Messrs Beck and Böhmer said they were confident the states would ratify Wednesday’s outline deal in the course of the year.

The states’ betting monopolies, which protect the “Lotto” lotteries that fund governments, arts and sports, were called into question last year when the European Union’s highest court said they contravened EU law.

The European Court of Justice said their rules were not “consistent and systemic enough” to uphold the contention that the system protected the public from gambling addiction – rather than protecting extra state revenues.

Betting at German horse-race tracks has been in commercial hands since the 1920s, and slot machines, which are a source of tax revenue for the federal government in Berlin, can be operated by anyone running a business.

But betting on the outcome of football matches has until now been reserved for the state lottery agencies – much to the annoyance of betting companies such as Bwin – although many states have been lax on enforcement.

The states said private operators could apply for seven national concessions for sport bets, probably from the beginning of 2012, with licence holders liable to pass on 16⅔ per cent of gross bets to state-government coffers.

The governors said bets would only be allowed on the outcome of games, not on half-time results or on the names of the scorers. Betting companies would be allowed to advertise in sports stadiums but not on television.

However, Bwin, the online-gaming group, slammed the proposals as “even more incon-sistent and incoherent” than current rules and forecast they would “be criticised by the European Commission for lack of compliance with EU law.

A spokesman told the FT the seven licenses would provide “no open market” and “no commercial system” and that proposed charges to be levied on concession-holders would make the scheme economically “unworkable”.

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