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German Casino Market enters Transition Period

Several states in Germany are in discussions over a crucial transition period. It is crucial in the sense that operators are waiting to see if they will be allowed to continue offering online gaming services before the vertical is legalized in July 2021.

The specific nature of the discussions and whether operators will be allowed to offer online casino services and products without any restriction is not yet clear. There are reports that those involved in these discussions don’t want to pre-empt any of the talks.

Federal states in Nordrhein-Westfalen are coordinating measures to see how illegal gambling in Germany can be implemented during the transition phase. Other states have also entered the transition phase that will see gaming in Germany go beyond sports betting as has been in the case in Germany for some time now.

Gamers seeking other forms of casino gaming are forced to join oversees casinos accepting Germany players. If fruitful, online casino gaming and poker will be regulated in the country, albeit under stringent conditions like €1 per spin on slot bets. And, table games licenses will be limited to the number of brick and mortar casinos in each state.

Legalizing Online Casino and Poker

German’s head of state met in Berlin in March 2020 to discuss whether online gaming and poker should be legalized in the country. The meeting also focused on deciding where the new regulatory authority will be located.

The meeting saw the lawmakers approve the legalization of online poker and casino gaming, but this will not come into effect until July 1, 2021. More about this is expanded in the Glücksspielneuregulierungstaatsvertrag (GlüNeuRStV).

According to the report, all states will have to submit their online casino and poker gaming plans to the European Commission before that are put into effect. According to the country’s leading News Agency, Deutsche Presse-Agentur (DPA), the industry’s activities will be under the management of a regulatory authority.

The authority will be established through GlüNeuRStV which will be in Sachsen-Anhalt. To many, this decision was surprising since they didn’t expect the legalization to come into effect so soon. Nonetheless, coming at a time when iGaming is among the top forms of online entertainment, it’s not a surprise. The country is indeed late in legalizing online casino gaming.

Strict Rules

Sports betting in online sites has been legal in the country. It wasn’t affected by the new complicated rules for operators a lot. Still, to be clear, sports betting in Germany is guided by a set of strict restrictions.

This is something that several bodies such as Operator association the Deutscher Sportwettenverband have criticized. Their argument is that Germans should be given broader options when it comes to sports betting, such as live betting and other match outcomes like who will win or score in the first half and so forth.

The argument is founded on the fact that sports betting in the country generate billions, and if more options are included, this amount will increase. Higher income from sports betting means higher taxes, enabling the government to benefit more profits from the industry.

Rules Governing Slots

Slots will have a cap of €1 per spin and must not be offered together with table games. There will be no autoplay option and neither will jackpots be permitted. With the cap in place, players who love to wager high amounts won’t be able to do so.

Specifically, the lawmakers decided on this to limit cases of irresponsible gaming, which are quite high with the unrestricted gaming in most jurisdictions across the globe. Casinos found not to comply with this rule will be closed permanently.

Operators will not be able to advertise their casinos and what they offer from 6 am to 9 pm. The lawmakers argue that this will ensure the content doesn’t reach an underage audience. On the other hand, the country’s Association of Private Broadcasters argued that the restriction will have a negative impact towards channeling players to legitimate online gaming offerings.

They further argued that the move would lower the potential revenue that could have been collected by media house if advertisements about online casinos were allowed to run any time.

Regulations about Table Games

Online table games like Roulette, Blackjack and Baccarat, sadly, will not be allowed during the transition period. The games must already be available separately from slots, and states will be given the option to grant lotteries a monopoly for the games.

For operators that continue to offer table games in Niedersachsen, payments to them will be blocked. In absence of this, a casino will eventually be forced to stop its operations. These conditions will not affect all states.

Take, for instance, Schleswig-Holstein. This state has taken a more liberal framework in which operators will be allowed to offer all products provided they honour a gross revenue tax of 20%. The model, however, will be replaced by GlüNeuRStV guidelines once it is implemented.

The Transition Period

The much-awaited transition phase had been under discussions for quite some time before a decision was reached. States like Bavaria, Hamburg, Nordrhein-Westfalen and Berlin played crucial roles in the discussions.

Although a decision to transit the industry was agreed upon, several states expressed a number of misgivings. Despite the lack of a unified voice, operators such as GVC Holdings which boasts a strong presence in the country through Bwin Casino brand has already circulated its proposed transition framework.

The proposal is meant to guide operators on how to implement the fundamentals of GlüNeuRStV in stages. According to GVC, doing so ensures the major elements of the treaty are in place before the scheduled date.

German’s transition period seeks to end the long period of unpredictability for the online gaming industry after the efforts to implement the 3rd State Treaty on Gambling failed. The treaty was derailed by legal challenges from an Australian bookmaker, Vierklee.

The bookmaker argued that the licensing and regulation process wasn’t transparent and that it favoured market incumbents within the Hesse courts.

Moving into the Future

Germany has entered into a transition period following the legalization of new gambling laws. The regulations will come into effect on July 1, 2021, giving Germans a new world of online gaming opportunities. Although strict rules will be observed, being able to access online games without having to turn to oversees casinos is enough.

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