In March this year, the German Conference of Ministers-President agreed on the third amendment of the State Treaty on Gambling (Dritter Glücksspieländerungsstaatsvertrag – 3. GlüÄndStV). This interim amendment is intended to extend the so-called experimental phase that allows private sports betting companies to operate in Germany alongside the state operator. Most gamblers in Germany consider that gambling laws need serious improvements.
In 2012 the German Conference of Ministers-President decided for the first time to suspend the state monopoly on sports betting for a period of seven years and to allow a limited number of 20 private sports betting companies to operate. However, court proceedings stopped the licensing procedure, and therefore not a single license has been granted since the opening up of the sports betting market.
GRC has just proposed several changes of the gambling laws, including new tax arrangements on unlicensed operators, along with the legalization of online casinos. Though, online casino games authorization should count on harsh rules and prescriptions which operators should follow. The Gambling Centre has also considered an idea for the launch of a new regulatory body to supervise the entire sector.
According to the GRC report:
“Land-based casinos generated gross gaming revenue of [$671.9 million in 2017 and paid [$353.13 million] in casino and sales taxes. The illegal online market, on the other hand, is estimated to have generated a total GGR of [$1.94 billion] that same year, but only paid value added tax of [$369.7 million]. Had they been subject to the same taxes as their land-based counterparts, these operators would have been liable for [$1.012 billion] in taxes.”
At present, Germany has a very lax Criminal Code which considers unlicensed land-based operations a criminal offense. Though, the law doesn’t have words about illegal online gambling which should be amended in the next period.
GRC further announces:
“Currently, the offer of online casino games on the Internet is largely illegal, but still takes place. It can be assumed that some states will continue to allow online casino games or will do so in the future. Also, for player protection reasons, a regulated market is preferable to a non-regulated market.”
The report is positively valued except for its stance about poker and advertising. According to the report, poker should be completely banned game as “susceptible to fraud and manipulation, “while each form of casino advertising should also be excluded.
After the constitution of the new regulatory body, it would be focused on
“incorporated public institution that would have the authorization to implement ordinances, oversee activity and provide a mechanism for operators, lawmakers and suppliers to obtain legal certainty as soon as possible in disputes.”
Germany has just ratified the third amendment of the State Treaty and previous changes will become part of the same instrument. However, this solution will remain in force until June 2021 when the country will look for a long-term solution.
According to the current status, the amendment will enter into force on January 1, 2020. This requires all participating German states to ratify the amendment by December 31, 2019. The national competent gambling authority of Hesse is expected to issue the licenses as soon as possible starting January 2, 2020. The minimum licensing requirements have already been published in July and it is now the time to prepare the licensing application.
With issuing the new licenses, the gambling authorities will be instructed to prohibit unlicensed sports betting and other unlicensed gambling services nationwide. It is relatively certain that Hesse will make the granting of sports-betting licenses dependent on no illegal (unlicensed) online casino games being offered at the same time. This will probably also include revoking a license if the operator does offer these services.
A further amendment of the State Treaty is envisaged for the period after June 30, 2021. This next amendment is intended to set up a new regulatory framework which, according to the wishes of Schleswig-Holstein as well as gambling associations in Germany, will also mean online casino licenses can be issued in other German states. The negotiations for this are already on the way and the further development needs to be monitored.