The regulation of online gambling in Germany has long been a contentious issue. Germany’s 16 States have, however, finally reached an agreement regarding the regulation of Germany’s gambling industry.
A government body akin to the UK Gambling Commission will oversee implementation of the regulations and issue new operating licenses to German-facing casinos. The new regulations regarding online gambling set to take effect in July 2021 are widely regarded as a comprise reached between those who would see online casino banned outright and those who have been advocating for a more liberal approach to online gambling.
The announcement of the new German Interstate Treaty on Gambling (ISTG 2021) was received with mixed feelings. Many believe that the stringent new regulations will hinder the chances of German-facing casinos to lure German players away from unlicensed sites.
On the other hand, there are many who welcome the new regulations, believing that the ISTG 2021 offer much needed protections for vulnerable players. German-facing casinos, are actively encouraged to implement the necessary changes to their set up prior to 1st July 2021 in order to obtain their new license and avoid hefty fines.
The ISTG 2021 will see the ban lifted on online slot games and online poker – a much-anticipated and welcome amendment to the current gambling laws. Online casino operators will be able to apply for a license that grants them the right to offer online sports betting, online poker, and slot machines.
However, although operators will be allowed to offer all three forms of online gambling under one brand, each must have its own specific area and there must be no cross-over. In other words, an online poker player, for example, will access games on a webpage dedicated to online poker, and there should be no visible reference to any other forms of online gambling offered by the site.
It is important to note that even though online slot games are allowed under ISTG 2021, there are certain restrictions. The new license will see online slot games subject to specific requirements concerning gameplay.
Going forward, players will only be allowed to bet a maximum of €1 per spin, and there must be a minimum of 5 seconds between each spin. It still remains to be seen what will happen if you want to play without wagering conditions in Germany, upon receiving any sort of promotion from the casino. These might be capped or even made redundant as many types of player incentives become forbidden.
One of the bones of contention regarding the ISTG 2021 concerns online casino games. The category of ‘Online Casino Games’ refers to video and live formats of casino games, such as blackjack, roulette, and baccarat. Licensed casino operators will not be allowed to offer online casino games unless they are granted a specific license by the federal state in which they are based.
It appears that each federal state will be allowed to issue licenses as they see fit, but the general consensus is that these licenses will be limited to online casinos that are associated with land-based casinos. What we do know for sure is that each federal state will not be allowed to issue a greater number of online casino licenses than land-based casino licenses.
Another issue that has ruffled many feathers concerns the new monthly deposit limits. Players are now subject to a monthly deposit limit of €1000 across all sites. This means that players are only allowed to spend €1000 per month on their gambling habits – in total. The monthly deposit limit will be monitored by a central authority using a ‘limit control file’. Operators are required to connect to this system, for which they must pay a fee.
Rules and Regulations
Operators must verify the age and identity of every player via means of a KYC procedure. Players are only allowed to play on one gambling site at any one time. Operators will be required to monitor an activation system which will show whether or not a player is logged in to another site.
In order to obtain a new online gambling license, an online casino is now required to pay a security deposit of no less than 5 million euros. Larger sites with a higher turnover will be expected to pay substantially higher rates than smaller sites, with the maximum deposit amount set at 50 million euros.
During the hours of 6am to 9pm, online gambling sites will be prohibited from running any form of advertising to promote their site. The laws specifically state that online gambling must not be touted as a way to fix financial problems, nor should it target minors.
An Uncertain Future
It is clear that the main concern of the German gambling authority is to protect players from developing problematic gambling habits, and to keep underage players out of online casinos.
The UKGC have been a guiding light in this regard, but the ISTG 2021 restrictions are such that it will be difficult for the German gambling industry to rake in the level of revenue enjoyed by the UK and other major gambling hubs.
How players react to the ISTG 2021 remains to be seen. Casual players are unlikely to feel the pinch, but high-rollers and professional gamblers will surely be looking to take their gambling habits elsewhere.