The unnamed operators argued 2020 legislation mandating at least 500m distance between gaming halls and betting shops disproportionately favours gaming halls, and limits operators from setting up sports betting outlets.
While they claimed this violated European Union law, this was dismissed by the court on the basis individual jurisdictions are allowed to develop their own gambling policy.
The suit went on to claim that the distance requirements would do little to protect minors and the vulnerable form gambling harm.
However, the 4th Chamber of the Berlin Administrative Court dismissed all complaints, arguing that the regulation was permitted by higher law.
State legislatures have the freedom to choose how to regulate gambling in their region, the court said. It also argued that the regulation did indeed to protect players against addiction.
Minimum distance requirements do not violate European law
Additionally, it dismissed the charge that regulations violate European law. The court said this is due to the State Treaty on Gambling allowing the state legislatures decide how addiction and player protection is fought, based on the different circumstances of each state.
The court said that, because these circumstances differ between states, the law did not violate the European law requirement for coherence. The court used the example of the state legislatures treating distinct forms of gambling differently as proof of this.
The Berlin court also confirmed a separate rule stating venues owned by the same company maintain a 2,000m distance from each other. That rule worked to prevent local monopolies and protect players from harm, it said.
The court heard that the State Office for Citizens and Regulatory Affairs (LABO) has used minimum distance requirements as grounds to block the planning permission for many betting venues in Berlin.
Because of the importance of the case, the court decided to allow all proceedings to be appealed to the Berlin-Brandenburg Higher Administrative Court.
Berlin’s Spielhallengesetz: the country’s strictest land-based gaming measures
The case dates back to June 2020 when Berlin implemented the Berliner Spielhallengesetz, setting out the minimum distance requirements for gaming halls. It has widely been criticised as the strictest legislation of its kind in Germany.
The regulations said gambling venues could not be within 200m of a school or other children’s facility.
The legislation limited operating hours, and restricted each venue to a maximum of three devices.
The law faced criticism from Novomatic and Gauselmann, who said it would result in a drastic number of closures to the city’s 496 gaming halls. Following implementation, they predicted the number of arcades would fall to just 120.
In October the same year, restrictions were extended to betting shops in the city. Like the gaming halls, the betting venues are not permitted to be within 200m of a school, youth facility and also a sporting venue.
Drastic decline in arcade numbers
By 2021, the predictions of the affect on the cities arcades proved broadly correct. That year, in response to a parliamentary question from SPD politician Daniel Buchholz, the Berlin Senate published figures on the number of gaming halls in the city’s 12 districts.
The statistics showed that the number of arcades declined 80% since their 2011 peak, when the city recorded 584 venues.
The Mitte district saw the greatest decline, falling 84%. This compares to Charlottenburg-Wilmersdorf with 79 percent and Spandau with 76 percent fewer arcades.
In comparison, Lichtenberg recorded the smallest decline at 27 percent.