Germany Agrees to an Online Gambling Transitional Period
Online gambling operators can continue to operate in Germany after the 16 states agreed on interim measures that last until July 2021. Firms must agree to comply with strict regulations to offer services.
The uncertainty of the German gambling market is over after the country’s 16 federal states agreed to a transitional period that allows operators to continue providing services to the lucrative German market, provided they follow strict regulations that are contained in the new legislation.
The proposals, now agreed by all 16 states, cover the period between 15 October 2020 and 1 July 2021. After this date, a new Interstate Treaty (IST) comes into effect. This announcement is good news for operators, many of which feared they would need to stop offering services until the new treaty comes into place. In the neighbouring Netherlands, operators had to serve a “cooling-off period” before they could offer their products to customers.
Authorities have confirmed that German-facing operators will not be prosecuted, as long as they follow rules that have been introduced. The interim rules will apply until new legislation is passed, these are currently at notification procedure level with the European Union. If passed, it is likely to introduce a new tax regime for online gambling and also the setting up of a country-wide regulator, expected to be based in Saxony-Anhalt, the 8th-largest state in Germany by area and the 11th-largest by population. German-facing operators have until 15 October to comply with the draft regulations in place, failure to comply could mean the operator could have their licence applications refused when the fully legalised market comes into effect in July 2021.
While the majority of operators are likely to comply, the new regulations are likely to reduce the revenue from players. When licences become available next year, the new German Interstate Treaty on Gambling (ISTG 2021) will come into effect. For a while, there were disagreements between the states. Some states felt the online gambling market should be liberalised. Whereas some federal states strongly advocated the introduction of a licensing procedure for online casino and poker operators, other states wanted to continue the outright ban. The treaty is seen as a compromise as it allows online gambling but introduces more stringent licencing conditions. These include;
Security deposit: All applicants must provide a security deposit of at least 5 million euros for smaller operators. The deposit is based on the expected monthly turnover and could be as much as 50 million euros.
Separation of verticals: Operators are allowed to offer different verticals (for example casino, sports betting) on the same domain, but these must be independent and graphically separate areas for each form of gambling. Operators are not allowed to cross advertise; for example, they cannot offer casino bonuses if the player is on the sports betting platform.
Player accounts: Players must create individual accounts using their correct details, and the operator must verify these. Currently, the regulations do not specify how these accounts should be verified; details are likely to be announced near the time.
Deposit limit: A hard deposit limit of 1.000 EUR/month/player across all operators will apply. This rule will mean if a player has spent 800 EUR with one operator, they will only be able to deposit 200 EUR with another operator/s. This limit applies, regardless of the player’s income. Additional requirement apply for virtual slot machines. A spin must last at least five seconds, the maximum stake per play is set at 1 EUR and stakes and winnings can not be used to build up a jackpot.