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FLUXX perceives tide turning in gaming market: EU Commission gives Germany the count

FLUXX AG / Legal Matter

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FLUXX perceives tide turning in gaming market: 
EU Commission gives Germany the count

- Commission initiates first stage of infringement proceedings against
- FLUXX welcomes Commission's action and calls for change to German gaming

Altenholz, January 31, 2008 – The EU Commission today announced that it was
initiating legal proceedings against the Federal Republic of Germany. At
its meeting the Commission resolved officially to request information from
Germany on a large number of provisions in the State Treaty on gaming,
which took effect at the start of the year. The letter of formal notice
constitutes the first stage of the infringement proceedings, which may lead
to charges at the European Court of Justice. Germany now has two months to
respond to the letter.

The EU Commission already officially notified Germany twice last year of
its reservations about its gaming policy. At that time the Commission
criticised above all the blanket ban on gaming over the internet, the
numerous restrictions on advertising and the ban on financial institutes
processing and making payments in connection with prohibited gaming
activities. In its official written response the German government brushed
aside the accusations with the terse remark that it did not share the
Commission's reservations.

The Commission also regards as problematic the authorisation procedure for
gaming agents that is enshrined in the new State Treaty on gaming, as well
as the sanctions and fines envisaged under criminal law for the staging of
online gaming, and for promoting and taking part in it.

The Commission furthermore points out that, in accordance with the case law
of the European Court of Justice, restrictions on gaming for the general
good (e.g. consumer protection) must contribute 'coherently and
systematically' towards limiting betting activity. A member state cannot
therefore claim that it sees itself obliged to restrict its citizens'
access to betting services if it is simultaneously encouraging them to take
part in state-backed gaming.

The current situation in Germany is particularly bizarre. Whereas lotteries
and sports betting are banned from the internet, horse betting is exempt
from the ban. The validity of licences harking back to the days of the
former GDR has not been definitively clarified. At the present, for
instance, it is possible to go betting in what used to be East Berlin, but
not in the west. There has actually been a sharp rise in the number of slot
machines. Certain forms of advertising are still permitted: postal, printed
and radio advertising – the preferred form of advertising of the state
lottery companies – are still possible.

'We expect prompt action from the German government, to rectify the legal
and economic madness imposed by the State Treaty on gaming,' declared
Rainer Jacken, Management Board spokesman of FLUXX AG. 'The Commission's
criticism of the State Treaty on gaming could scarcely be more clear-cut.
If Germany yet again turns a deaf ear to all the EU's reservations, its
gaming policy will be lined up for defeat before the ECJ and Germany will
face compensation claims and fines running into billions. Its tax payers
will once again end up footing the bill.'

About FLUXX:
FLUXX is a company specialising in the handling of lotteries and betting,
with registered office in Altenholz, near Kiel. The necessary rights and
licences and the technical and market-relevant expertise place FLUXX in a
position to be able to arrange any form of licensed gaming for consumers,
using a variety of sales channels. In addition to self-marketed services
such as JAXX and myBet, FLUXX makes its products and services available to
other companies with extensive customer contacts. These include AOL,
Freenet, Lycos, Yahoo!, Premiere, Burda and SCHLECKER. FLUXX AG has been
listed on the Frankfurt Stock Exchange (Deutsche Börse) since September
1999 (ISIN DE000A0JRU67); the group currently has 150 employees.

Investor Relations & Corporate Communications
Stefan Zenker
Tel. +49 (40) 85 37 88 47
Fax +49 (431) 88 10 44 0
Mail stefan.zenker@fluxx.com

31.01.2008  Financial News transmitted by DGAP
Language:     English
Issuer:       FLUXX AG
              Ostpreußenplatz 10
              24161 Altenholz
Phone:        +49 (0)431 88 104-0
Fax:          +49 (0)431 88 104-40
E-mail:       info@fluxx.com
Internet:     www.fluxx.com
ISIN:         DE000A0JRU67
WKN:          A0JRU6
Listed:       Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
              in Berlin, Düsseldorf, Hamburg, München, Stuttgart
End of News                                     DGAP News-Service