A German’s state’s efforts to offer a stopgap online sports betting licensing regime has been struck down a local court.

Last September, the German state of Hesse announced that it would allow online betting operators to apply for Duldungsverfügungen aka “temporary toleration dispositions.” These pseudo licenses would only apply within Hesse, offering no legal cover for operators who took wagers from punters in the other 15 German länder.

But the Administrative Court of Kassel issued a ruling on Monday that undermined Hesse’s plans. Responding to an appeal filed by a Malta-licensed operator, the Court ruled that the state had no authority to compel internationally licensed online operators to participate in the so-called ‘toleration’ scheme.

The Court cited a number of factors in arriving at its conclusion, including the fact that the application process wasn’t entirely transparent, and that Hesse’s scheme was less about opening up its market and more about imposing penalties on unauthorized operators. The Court also determined that online sports betting was a transnational issue, and thus beyond the scope of an individual state to dictate rules to international companies.