Germany: Federal Administrative Court – Second decision on the legal qualification of an entrance fee

In a ruling of 22 January 2014 the Federal Administrative Court reversed a decision of the Adminstrative Court Halle concerning the qualification of an entrance fee to a Poker tournament as a game of chance (BVerwG – 8 C 26.12). According to the Federal Adminstrative Court the payment of an entrance fee does not qualify as a „wager to obtain an opportunity to win“ (which is a requirement for a game of chance to fall under German gambling regulations), at least under certain conditions.

This is now the second ruling within a short period of time where the Federal Administrative Court decided on the qualification of a entrance fee. We commented on the first ruling of October 2013 here. Again, the court holds that a „wager to obtain an opportunity to win“ is only given where there is a direct connection between payment and the chance to win. According to the court, this is not the case where only an entrance fee is paid which is exclusively or mainly used to cover the costs for the tournament.

This added reservation seems odd considering that the ruling in October 2013 did not contain any reservation that the entrance fee would need to be used for a particular purpose. Since only a press release of the judgment has been released so far, we can only speculate as to the reasons of this slight shift of reasoning which may have to do with the fact that the earlier judgment concerned „only“ a fantasy football game, while this recent judgment concerned a Poker tournament. In our view, making a distinction between the type of game which is played seems inconsequential when it comes to the qualification of an entrance fee.

Please note that so far only a press release of the court has been published. We may update this article after the full reasoning of the court is released.