Warnings have been issued by the Government authorities to Germany’s banks that international online gambling operators are not supposed to be processing payments.
On Friday, the German public broadcaster NDR reported that the Lower Saxony Ministry of the Interior had sent letters to 5 German banking industry associations reminding them of their obligations not to allow payments between the gamblers in the country and online gambling platforms that are internationally licenced.
The country is currently heading towards a more liberal regulatory regime for online gambling, but there is still at least 17 months away from any fresh gambling treaty. Currently only sports betting is allowed, and only for operators who have submitted applications to the Hesse State Ministry of Interior and Sport.
A few years ago German banks were forced to strengthen their regulation of online casino payment processing after an exposé that threatened several major financial firms. The government in Lower Saxony has in recent days forced Paypal to stop acting as a go-to alternative for German gamblers and online casinos, prompting the digital financial institution to cut those payments a few months later.
The new letter to the banks relates to the PayPal affair and says: “further prohibition orders are expected to follow. The banks were reminded that the current prohibition “applies directly and obliges the payment service providers to take appropriate, independent measures.”
While the draught agreement on a fresh Federal Gambling Treaty will lift the ban on online casino and poker goods, it contains many provisions troubling operators, including many limited in-play sports betting, a €1 maximum stake in online slots spins and monthly deposit limits.
Most recently, online gambling affiliates were the ones crying foul after discovering wording that would ban German licences from using “affiliate links” or making marketing partners payments based on betting turnover or any form of stake-dependent remuneration.
One of the companies that have applied so far for a sports betting licence in Hesse is Playtech-owned HPYET. Playtech offers online gambling technology and is a major B2C operator in some markets, particularly in Italy.
HYPBET began retail and (Malta-licensed) online betting business in Austria and Germany in 2017, as Playtech deepened its involvement in sports betting through its BGT Sports division. Michael Lessig, German MD of HYPBET, called the application for a Hesse licence “a big milestone in our still young company history.”
Lessig said his company anticipated “a regulated market environment and fair competition with clear rules,” while stressing that Germany’s regulations must be “in line with the market” if the government wants to gain a majority of the new overseas business going.