Not everyone is jumping with joy over the new German State Treaty. A lot of debate preceded the event from the country’s sixteen states. The treaty sets forth a gambling framework with restrictions for operators.
According to the German Sports Betting Association (DSWV) a consensus has been reached. Fortunately, there will not be a ban on online casino games. This is a first step towards modern, market-compliant gaming regulation in Germany.
There is possible harm
However, President Mathias Dahms notes possible harm from the restrictive terms set out in the regulations, especially in regard to live betting. It is all intended to steer players to legal forms of gambling.
“Relevant live betting markets such as tennis, handball or basketball, as well as popular live betting forms such as over-under betting, could no longer be offered.”
Dahms also states that it should not be forgotten that live betting is particularly popular and accounts for around 60% of all bets. Disappointed consumers will turn to black market offerings that don’t comply with legal requirements.
Furthermore, the DSWV has called into question the monthly deposit limit of €1,000 (£844/$1,108) for each player across all sites. The opinion is that this would only serve to limit growth, rather than protect players.
Dahms was vocal in his criticism to stop consumers from accessing their accounts on one site for five minutes after logging out of another. This “completely ignores the reality of life for consumers in the digital age”.
Amid concerns, the treaty has been established and a new federal regulator will oversee licensing and enforcement.
Some see the mandated controls as too restrictive so changes may be forthcoming in the 70-page treaty document.
But the lottery is on board…
There are some happy campers at the state lottery association, the Deutscher Lotto- und Totoblock (DLTB). Previous vocal opponents have shifter their stance, especially on stamping out lottery betting.
The chair of the DLTB, Lotto Rheinland-Pfalz managing director Jürgen Häfner, has praised the regulations for preserving the state lottery monopoly, while strengthening efforts to tackle the black market.
“With this future-oriented agreement, the federal states have underlined that the federal system works very well in Germany. The DLTB will participate constructively in further consultations.”
Taxation remains an issue
At present, gaming in Germany is subject to VAT on a cash basis of 16% because it is not explicitly VAT-exempt.
This rate is much lower than that of casinos at 40-80% of gross gaming revenue (GGR) and lottery at 80% of GGR.
Analysts at Regulus said that Germany should make gaming VAT exempt and create a specific tax regime for such activities. However, in view of the other rates currently in place, it is unlikely that the number will be below 30%.