German Betting Companies

A meeting of Germany’s heads of state in Berlin saw lawmakers approve gambling regulations to legalise online poker and casino from 1 July, 2021, as well as deciding on the location of the country’s new regulatory authority.

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The Glücksspielneuregulierungstaatsvertrag (GlüNeuRStv), which expands the nationally regulated igaming market beyond online betting for the first time, must now be ratified by each state parliament and submitted to the European Commission for approval before it can be brought into effect.

According to the Deutsche Presse-Agentur (DPA), the market will be overseen by a new regulatory authority, established through the GlüNeuRStV, based in Sachsen-Anhalt. Sources in Germany described this decision as “surprising”.

The likes of Nordrhein-Westfalen, Schleswig-Holstein, Baden-Württemberg and Hesse – which is handling the sports betting licensing process set out in the third amended State Treaty on Gambling – were all understood to be interested in hosting this body.

Legal sources said there had not been any substantial changes to the terms of the GlüNeuRStV already made public. This suggests that while sports betting, online poker and online casino games including slots will indeed be permitted, they can only be offered with significant restrictions.

For sports betting, this limits live betting to markets on the final result or next scorer, something that has been criticised by bodies such as operator association the Deutscher Sportwettenverband.

Slots, meanwhile, will be subject to a €1 per spin stake limit, and must be offered separately to table games, with no autoplay function and no jackpots. States will also have an effective veto on whether to allow table games, and could give their lotteries a monopoly over the product.

The mandatory deposit limit of €1,000 across all providers first included in the third State Treaty will remain in effect, while operators will not be allowed to advertise between 6am and 9pm. The German association of private broadcasters, Vaunet, has argued that this will not only impact efforts to channel players to legal offerings, but also reduce potential advertising revenue for media businesses.

Before the GlüNeuRStV comes into force, the third State Treaty remains in place, limiting the market to online betting until 30 June, 2021. This came into force in January this year, though the Regional Council of Darmstadt, the body in the state of Hesse responsible for processing licnces, is yet to issue its first approvals.

In February it said it had received 30 applications, with a further 20 operators signalling their intention to apply, and that it was preparing to license a number of operators.

Should all 50 be approved, it said, this would channel up to 99% of sports betting activity into the legal market.

Online Betting Companies

This will be accompanied by enforcement action against operators that have continued to serve German players without applying. Around 100 companies were warned over operating without a licence, prompting 10 to withdraw from the market.

Admiral Sportwetten, a brand operated by Novomatic subsidiary Löwen Entertainment, has announced that it will withdraw from the German retail betting market, blaming years of regulatory stasis for the move.

The business’ 17 Admiral-branded licensed betting offices have been closed since mid-March as a result of novel coronavirus (Covid-19), but will now not reopen once the lockdown is eased. Sales have fallen by more than 95% since the shops were closed, and sporting events suspended, it noted.

However it was the failure of efforts to regulate sports betting, rather than Covid-19, that resulted in the decision to pull out of the market, the operator explained.

Online Betting Companies

“Our withdrawal is the sad result of the failure of German gambling regulation,” Admiral Sportwetten managing director Oliver Bagus said. “In particular, as a private sports betting operator, we were at a massive disadvantage from the start. The Covid-19 crisis further exacerbated this inequality.

“The regulatory framework destroyed the business case for the future-proof and legally secure continued operation of the Admiral betting shops in Germany.”

He said its employees would be offered new roles in its sister business, the gaming hall chain Admiral Entertainment.

Admiral had initially hoped to be one of the online betting operators licensed under the third State Treaty on Gambling, which came into force in 2012. In 2014, when the market was to be limited to 20 concessionaires, it had looked set to be awarded one of the licences.

However the process was then derailed by legal challenges from those not awarded a licence. Admiral only launched in Germany in late 2017, after being given assurances that it would be allowed to operate by state authorities.

It had then aimed to enter through the third amended Treaty, which came into force in January this year. However that process was then derailed by a legal challenge brought by Austrian bookmaker Vierklee.

“The third amended State Treaty on Gambling should have finally removed the regulatory blockage,” Löwen Entertainment board member Dr Daniel Henzgen said. “Instead the goal of bringing sports betting into the legal market once again died in court.

German Betting Companies Vs

“After more than eight years, we are still lacking legal certainty, and above all, a fair playing field.”

This, Henzgen said, was due to failure of the German authorities to treat gambling as a mass market entertainment product.

“This means there is no consistent regulation geared towards the goals of protecting players and the minors, combatting crime and allowing consumers to gamble safely, thus laying the foundation for entrepreneurial investment and jobs in Germany.

“This regulatory approach is pushing consumers to illegal operators, and creating illegal business for the illegal providers at our expense,” he added. “The closure of our sports betting shops is only the latest indication of the ongoing failure of German gambling regulation.”