Well, there were a few incidents of this type in the past weeks.
It is terrible as it is, but it is usually not the government, that cancels the LAN-Party's.
Here is how I understand what happens:
For events like that, you need a lot of room. That means normally you rent a gym, a town hall, a parish hall or something like that. Normally these places are owned by the municipality.
They are rented away for a lot of different events, and before it was no big deal to do whatever you want to do there, from weddings to concerts, no one cares, as long as you clean the place up afterwards and pay.
With the recent school shooting in Winnenden, mayors and municipal councils get a lot of pressure from the local press and conservative organizations as soon they find out that there will be a LAN-party in the area. And that is why often conservative mayors don't want to rent their town halls etc to such events anymore. Sometimes, when the contract is already made, they cancel it, and that seems to be what has happened here.
To make a long story short:
It is not the government that forbids the gaming events (they maybe wish they could).
But it is the local municipality, that refuses to rent their places to events where people play "Killerspiele" - killergames.
Bad enough, because it is very hard to find affordable places, that are not owned by local municipalities.