7 September 2020
Under current German gambling law, the provision of (online) gambling services, such as casino games, poker and sports bets is generally prohibited to private providers. For online casino games and poker, licenses are not available, and the existing sports betting licensing regime has failed repeatedly.
The situation is supposed to change mid-2021, when a more liberalized gambling law shall come into force; however, this revised gambling law has not been finally ratified, yet.
In order to allow for some legal certainty, the German federal states have now agreed upon a “toleration” of gambling offers in Germany: Apparently from October onwards, gambling offers will be tolerated to the extent that they are provided in line with the requirements of the future gambling law 2021. To the extent that gambling providers do not adapt their services in line with the toleration procedure, they may be banned from the future official licensing procedure as they may be regarded as unreliable. Lack of compliance with the toleration requirements will likely mean strengthened enforcement by the regulators.
It is currently unclear, how the toleration shall look like in practice, and which procedure shall apply. The federal states are currently drafting “enforcement guidelines” which shall give further guidance.
The future German gambling law which shall be the basis for the toleration, the Interstate Treaty on Gambling 2021 (“ISTG 2021”) envisages fundamental changes to German online gambling law: The most significant amendment includes the lift of the online ban for online poker and online slot machines (and to some extent online casino). The following overview shows the requirements that will likely affect online gambling operators the most:
The ISTG 2021 includes a license regime to enable providers to obtain licenses to offer online sports betting, virtual slot machines and online poker. According to the new law, virtual slot machine games are simulations of terrestrial slot machine games offered on the internet. The possibility for obtaining a license for online casino games will be subject to separate laws of the individual federal states (see below).
The requirements for obtaining a license to offer online sports betting, virtual slot machines and online poker are very similar and only vary in details. The common requirements particularly contain the following:
In addition to the general requirements, the ISTG 2021 provides additional requirements for virtual slot machines:
It is positive to note that regarding sports betting, bets will be allowed on the outcome of a game as well as on events during the game, or a combination of both. Further, live bets will be allowed under specific requirements. In addition, online sports betting licenses granted before July 1, 2021, will remain effective until December 31, 2022. However, a German court suspended the current licensing procedure in April 2020.
The ISTG 2021 defines online casino games (in contrast to virtual slot machines) as virtual simulations of casino games and live broadcasts of terrestrial casino games with the possibility of participation via the internet (e.g. roulette, black jack). The law itself does not regulate licenses for online casino games. However, the German federal states can provide for respective regulations in their individual local laws. It is expected that online casino licenses will be available but subject to the specifications for a license to operate an offline casino. This particularly includes a restriction on the number of licenses. The ISTG 2021 stipulates that the competent authority may not issue more online casino licenses than licenses available for land-based casinos.