The recent history of the rules and regulations concerning gambling and online casinos in Germany has been complicated but the updated Interstate Treaty on Gambling (“ISTG 2021”) provides some new licensing possibilities for those in the industry. This new treaty also outlines rules on gambling advertising, licensing conditions and tax rates. The licenses issued under the new regulation will be valid across Germany. Licensing across Germany is a big change from the old laws which were often restricted elements of online gambling to the German state of Schleswig-Holstein as the state issued several gambling licences to companies operating online when other federal states did not.
New Rules for Online Gambling in Germany
Gambling laws in Germany have been highly restrictive over many years. With the developments in the industry in recent times, it was clear that a change was needed in regulating online casinos and other gambling outlets. For this reason, in early 2020, the heads of German states approved of new gambling rules and regulations for online casinos and online poker. These new rules came into effect on July 1st 2021. However, although the regulatory framework will be less restrictive than previously, there are restrictive elements built into the law.
The restrictive elements are designed to provide players with protection and prevent gambling addiction. These restrictions include limits for spin-stakes, strict advertising laws (outlined below), limits on in-game sports betting (limited to next scorer or final result) and slot machines will be restricted regarding how much can be bet at one time. Furthermore, customers will be limited regarding the deposit they can provide each month. This limit will be at a maximum of €1000.00 per month, and there will be measures in place to monitor the providers regarding this manner. Online gambling platforms that breach these rules may find themselves facing license withdrawal and other sanctions.
With these rules and restrictions in place, companies in the online gambling industry should certainly consult with experienced German legal professionals in advance to ensure that they are compliant. At Schlun & Elseven Rechtsanwälte, our legal team will support you in any legal disputes relating to the new laws on online gambling in Germany.
New Licensing Laws for Online Gambling and Online Casinos in Germany
The update in rules around licensing means that those companies issued with licences will be able to operate across Germany. These licences that will be issued are valid for five years. The ISTG 2021 generally permits private companies to apply for licenses to offer sports betting, virtual slot machines and online poker. German gambling regulation defines gambling as a “game of chance”, and for an activity to be considered “a game of chance”, it needs to contain the following three elements:
- Valuable consideration.
- Determination of winnings is entirely or predominantly a matter of chance.
- The consideration is given in exchange for a chance to win.
However, certain aspects of the licensing process, particularly concerning online casino games, will be determined by laws within the individual federal states. Licence specifications will likely be modelled on the laws relating to the operation of more traditional, land-based casinos.
The new Interstate Treaty on Gambling has introduced a new national gambling regulator that will be based in the German state of Saxony-Anhalt. This body will be responsible for issuing organisers' licences and represented by the Saxony-Anhalt State Administration Office in Halle. Applications for these organisers' licences can be applied for by applicants situated in European Union Member States or those in the European Economic Area. At Schlun & Elseven Rechtsanwälte, our lawyers will oversee the applications and ensure that your application fulfils the requirements set out under the new law. Do not hesitate to contact our lawyers for further specialised advice.
New Advertising Rules for Online Gambling in Germany
Although the new gambling rules have provided some liberalisation of German laws, there are heavy restrictions with gambling advertising. The German states hope that the restrictions will help to reduce the impact of advertising on younger people in particular. For this reason, online gambling platform advertising is not allowed between the hours of 06:00 and 21:00. Advertising can also not be targeted at minors or some categories of “vulnerable” people. Furthermore, the new law also prevents platforms from cross-advertising, whereby they cannot, for example, promote their online casino while the user is engaging with their sports betting platform.
There will also be rules advertising relating to sports gambling. Advertising for betting on a live broadcast sports event immediately before or during that event is not permitted on the same broadcasting channel. Although jersey sponsorship and other general sponsorship of sports teams will still be permitted, there are limits in place relating to the use of active athletes to promote sports betting companies.
Misleading advertising relating to online gambling is also not permitted as well as the promotion of gambling as a means of resolving financial troubles. Direct and targeted advertising via SMS and telephone calls are also strongly limited by the law.
Why were the New Online Casino Regulations and Rules in Germany Introduced?
Online gambling and online casinos have been in a grey zone in Germany for several years. This has lead to legal battles and conflicting views from federal states. Before 2008 gambling was not regulated to the degree it is now; however, German states then sought to limit online gambling. The Glücksspielstaatsvertrag (“Interstate Treaty on Gambling”) was introduced to find a new legal solution. However, there was disagreement between the 16 federal states as Schleswig-Holstein decided to issue gambling licences for six years to several companies, including Ladbrokes, Bwin and others. Following this initial licencing, Schleswig-Holstein withdrew from giving more licence and largely adopted the legislation in place.
It has been difficult to reach this stage because different German states have had differing views on online gambling. Reaching an agreement between the states has led to the compromise solution that is now in place. Whereas states such as Schleswig-Holstein have argued for more liberalisation of the laws, others have opposed them.
The desire to protect customers from some of the risks of online gambling is understandable but not providing a solid legal basis for online casinos, and other forms of gambling in Germany, has resulted in customers using black market providers. This has seen a lot of the profits from online gambling leave Germany. In the age of the internet, trying to prohibit online gambling or strictly limit it has been a difficult task. Determined customers looking to gamble have been able to get around the blocks in place.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.