Germany's New Online Gambling Regime Takes Effect

Germany’s New Online Gambling Regime Takes Effect

Germany’s experimental sports betting regulatory regime started on January 1, which means that operators willing to run wagering services on the territory of the country can now only do this after obtaining licenses from the competent licensing authority – the Darmstadt Regional Council of the state of Hesse.

That initial phase for the regulation of sports betting will run through June 30, 2021, and German lawmakers will be expected to have crafted a refined, permanent framework until then.

The Darmstadt Regional Council can now start issuing licenses to those operators that have already submitted their applications. It will also continue to accept and review newly submitted applications.

The authority said in a notice dated January 2, 2020 that it would accept applications submitted by post or email and that licenses would be granted to those operators that meet the minimum requirements that were made known last year. It also became known that the licensing procedure would not be subject to any additional deadlines.

The applications that have already been submitted will be processed on a “first come, first served” basis.

Third State Treaty on Gambling

After two unsuccessful attempts in previous years, Germany’s 16 states approved in the spring of 2019 the so-called Third State Treaty on Gambling. The piece of legislation set out the experimental sports betting regulation period that started on January 1 and will remain valid until mid-2021, and enabled betting operators willing to operate in Germany to obtain permits and run their operations in a regulated environment.

The State Treaty on Gambling removed a cap on the number of sports betting license applicants that its predecessors – the First and Second State Treaties on Gambling – contained. Germany’s previous efforts to regulate sports betting were slammed by industry stakeholders and EU authorities for being way too restrictive, and the cap on the number of operators that were to be allowed to enter the local market was one of the most heavily contested provisions.

However, German license holders will still face heavy restrictions once they are given the green light to operate in the country. They will not be allowed to offer in-play betting as well as online casino and poker products.

In July 2019, the Darmstadt Regional Council warned Germany-facing operators to halt all unauthorized operations. The council reiterated its warning in an open letter from mid-November, saying that no unlicensed activity would be tolerated and that any unlicensed operators that continue to target German customers after January 1 would face a prohibition procedure.

Despite the warnings, there weren’t many operators to apply for licenses prior January 1 and it is yet to be seen how many would move to apply now as the new regime is in force. However, bet365 announced late last year that it was shutting down its Germany-facing online casino. The company told its affiliates to remove any Germany-focused promotional materials relating to its gaming operation.

Given the fact that the major gambling operator has closed its casino for German players only, this could probably mean that it is planning to enter the local sports betting market.

Minimum Requirements

As mentioned earlier, operators interested to apply for licenses in Germany were informed by the Darmstadt Regional Council that they would need to meet certain minimum requirements.

These requirements include proof, declarations, and documents covering a number of areas, including:

  • Information about the license applicant and its representatives
  • How the applicant plans to address protection of minors and what responsible gambling measures it intends to deploy
  • Payment processing and IT security

In other words, license applicants must provide the competent licensing body with information about concrete measures that are set to be implemented relating to responsible gambling, exclusion of minors and self-restricted bettors, prevention of gambling addiction, and dealing with problem gambling behavior.

Sports betting operators are also required to list all payment methods that will be used on their websites and provide information about their websites and any bonuses and other discount offers they intend to use to attract bettors.

Sports betting operators will also need to obtain additional advertising licenses if they want to promote their offering on television or the Internet.

Source: New sports betting licensing procedure starts in Germany

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