Some German states are in discussions over a possible transition period that could allow gambling operators to continue providing online casino content until the vertical is legitimized from July 2021.

The precise nature of the discussions, and if this would allow operators to offer online casino without any kind of restriction, is as also unclear, with reports claiming that they don’t want to pre-empt the discussions.

But, a spokesperson for the state government of Nordehein-Westfalen said:

“The federal states are currently coordinating the extent to which enforcement measures against illegal gambling can be effectively implemented in the transition phase.”

While other states are yet to respond to requests for comment, local media reports that the chancelleries in Hamburg, Berlin and Bavaria are additionally involved in the discussions.

The talks are playing out before the implementation of the Glücksspielneuregulierungstaatsvertrag (GlüNeuRStV) from July 1, 2021. The revised regulatory model, which is as of now subject to a standstill period as it is seen by the European Commission, expands the online market beyond sports gambling for the first time.

From July 2021, online casino and poker will be regulated, although under strict conditions, such as a €1 per spin cap on slot stakes, and table games licences limited to the number of land-based operators in every state.

Meanwhile, the €1,000 spending limit set out by the third amended State Treaty on Gambling is set to be extended across all verticals. That treaty theoretically was implemented from January 2, 2020, as a temporary measure before the expanded regulatory framework was introduced.

However, casinos have been left in uncertainty after a court ruling derailed the sports gambling licensing process under the third State Treat.

A case submitted by Austrian bookie Vierklee saw the Administrative Court of Darmstadt judge the process was being conducted without due transparency by the Regional Council of Darmstadt, the Hessian arm responsible for providing licenses. The Regional Council has filed an appeal for the ruling.

Possibility of a transition period, which operator arm the Deutscher Sportwettenverband has previously called for, initially came out through a separate legal challenge in the state of Hessen. This saw proceedings suspended in an unrevealed casino’s appeal against a prohibition order given by the Regional Council, to allow the two sides to negotiate a compromise deal.

When the third State Treaty was first imposed, an equivalent scenario came up after legal challenges brought the licensing process to a stop. This in the end saw Hessen, as the state responsible for licensing, implement a toleration scheme or Duldung, whereby casinos that paid tax on German revenue and integrated with the national self-exclusion system would be allowed to conduct business without a license.

In the current uncertainty, states have taken different approaches to online gambling operators. Whereas some have considered allowing online casino, since it will be legalized in under a year, others have sought action against the firms providing the vertical.

Last month, the Hamburg Ministry of the Interior and Sport submitted complaints in court against a trio of operators for breaching the prohibition on igaming, GVC Holdings (among the three), claiming the move to have “no merit or legal standing”.

In Niedersachsen, the state responsible for providing payment blocking orders against unlicensed casinos, Freie Demokratische Partei (FDP) MPs have questioned the state’s hardline position against the industry.

Under the GlüNeuRStV, the state of Sachsen-Anhalt will host some federal regulatory authority, and in case it’s approved by the European Commission and implemented, states will be bound by its terms till December 31, 2028 at the earliest. Still, it must be approved by 13 of the nation’s 16 states before it is rolled out.


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