Germany’s Gambling Regime Secured Whilst Stakeholders Demand Radical Changes

After being ratified by the Bundesländer (state parliament) of Saxony-Anhalt on Wednesday, Germany’s Fourth Interstate Treaty on Gambling (GlüNeuRStV) is set to go into effect on July 1st.

Prior to the introduction of Germany’s new federal regime governing online gambling services, the Interstate Treaty had received the requisite approval of 13 states.

However, since the Lander is assigned to house the regulatory agency regulating German gambling laws and operator actions, the approval of Saxony-Anhalt was deemed essential for the Interstate Treaty’s ascension into federal law.

New federal regime

The Interstate Treaty will be signed in July, after the Bundesrat (Germany’s Federal Council) decided in 2012 to have Germany’s Lander agree to create a new federal regime for online gambling services.

In January 2020, Germany’s 16 autonomous Lander ‘agreed in principle’ on the final Treaty arrangements, following year-on-year disputes over the Treaty’s obligations, taxes, rights, online casino laws, and licencing conditions.

The Bundesrat (Parliament) will present the agreed-upon GlüNeuRStV agreement to individual Bundesländers for federal ascension in 2020 – a directive seen as Germany’s last opportunity to control online gambling after the EU rejected the Treaty due to fundamental weaknesses in its nature in terms of ensuring competition standards.

DSWV – Germany’s Sports Betting Association – welcomed Saxony-approval, Anhalt’s saying it put an end to years of “regulatory uncertainty for Germany gambling consumers.”

Beginning of a new age

DSWV President Mathias Dahms said: “This is the beginning of a new age of gaming regulation in Germany. After sports betting, the federal states are now rightly regulating further online games of chance in order to finally control what is happening on the market.

“Consumers benefit from clarity and security: providers with a state seal of approval meet the highest standards of consumer and youth protection, gambling addiction and fraud prevention.”

Reassurance of more changes

Despite the Treaty’s promise of ascension, DSWV maintains that the Bundesländers must ensure that the GlüNeuRStV undergoes more changes in order for the system to appeal to a mass-market audience.

The DSWV announced that its members would support current arrangements, but that radical changes on a high 5.3 percent tax on online poker and slot machines, as well as additional in-play wagering limits on sports betting markets, were needed.

“Because in the end only the black market profits from this, no other country in Europe taxes the stakes in virtual slot machine games, but always the gross gaming revenue – the actual revenue of the gaming provider,” Dahms remarked.

“In this way, Germany becomes a wrong-way driver in tax policy. We therefore appeal to the members of the Bundestag not to hastily wave through the draft of the racing betting and lottery law, but to deal with the issue in greater depth in the coming electoral term.”

The DSWV also cited high-cost enforcement requirements for licenced operators, who would be expected to register player information for each Lander gambling registry individually. The requirement was also challenged by the organisation, as German gambling will be controlled by a central agency in Halle/Saale (Saxony-Anhalt).

“Adjustments will have to be made here soon,” said the DSWV. “We place our hopes in the new authority, which will shape and objectify the gambling policy debate in the future.”

Once in place, German Landers will be required to implement the GlüNeuRStV regime’s rules until 2028, when states will be given the option to withdraw or change the Treaty.