Germany reveals transitional operating period for online casinos

Cvetanka Cvetanovska | Published 11 Sep 2020, 1:49 p.m.

Germany has agreed to a transitional period for online casino and online gambling, allowing operators to continue operating on the market as long as they follow specific rules and recommendations. This happened only a few months after German regulators approved online gambling on a state level and a new regulatory body.

The country’s 16 federal states have agreed on transitional regulations that will tolerate the presence of online casino gambling activities. However, the current legal framework is only a temporary solution and will be replaced by a permanent law between October 2020 and July 2021. The permanent law will permit the provision of both online casino and betting services.

Limiting the stake on online slots

Operators already doing business in Germany will not be required to turn off their offers or face a cooling-off period before applying for an official license, as it was in The Netherlands scenario. Few online casino operators publicly pointed out the Dutch licensing procedures as unfair and discriminatory.  In Germany, operators will not be prosecuted if they can’t meet the new restrictions, which will include a €1 stake limit on online slots and an outright ban on online roulette and blackjack.

The upcoming legislation (also hinted as a new tax regime) is currently at notification procedure level with the EU Commission. Rumour has it that a new gambling regulator will be set up in the Saxony-Anhalt area.

Germany’s Third State Treaty on Gambling (TST) took effect early this year as a temporary framework paving the transformation of the online gambling industry. The agreement authorised the provision of online sports betting in Germany. This assigned Darmstadt Regional Council and Hessian Ministry of Interior with accepting, processing and approving/rejecting license applications. In April, the Darmstadt Administrative Court blocked the issuance of sports betting licenses after an Austrian operator complained that Germany’s licencing process was not transparent and favoured companies previously active in online gambling.  

States emphasise safety and black market challenges

Gambling brands have to comply with the draft regulation until the 15th of October; otherwise, they risk losing their permission to operate once the legalised market goes live in 2021. The only state where casino gaming is already legal is Schleswig-Holstein, but many operators have been offering their products nationwide for years. The states that have opposed the period of transition are Saarland, Saxony-Anhalt and Bremen. They claimed players would not be adequately protected in this period of change and that transition will likely lead to black market leaks, as some players could seek out less restrictive offers.

GVC, the betting market leader in Germany supported the initiative and the introduction of the transitional period. They’ve presented their action plan to the public on what could be successfully implemented by the 15th of October. Then, they also showed a timeline which outlined other high-level proposals and their implementation period.

Future analysis and statistics show that if Germany’s online casino market implements the new laws and regulatory recommendations, it could be worth an impressive £4.6 billion by 2024.