As of 1 July 2021 a new Interstate Treaty on Gambling ("ISTG 2021") will come into force across Germany which includes new licensing possibilities for sports betting, virtual slot machines and online poker for private operators. Additionally, the new ISTG 2021 will include new rules for advertising. Alongside the ISTG 2021 the tax regime for sports betting, virtual slot machines and online poker will be changed in Germany. Licenses issued under this new regulation will be valid in all of Germany.
ISTG 2021 allows private operators to apply for licenses to offer sports betting, virtual slot machines (online simulations of terrestrial slot machine) and online poker. Licenses will be valid for a period of five years. The regulation does not include online casino games. These are defined as virtual simulations of casino games (such as Black Jack and Roulette) and live broadcasts of a terrestrially conducted casino games with the possibility of participation via the internet. The possibility for obtaining a license for online casino games will be subject to separate laws of the individual federal states. Likely, the legislators will model the laws on the specifications for a license to operate a land-based casino.
The requirements for obtaining a license to offer online sports betting, virtual slot machines and online poker are very similar and only vary in specific topics. The main aspects of the common requirements cover the following:
Additional specific rules e.g. on KYC for players, exclusion of minors and self-exclusion rules apply.
As per the end of May 2021, the technical guidelines for access to the “limit control data base”, a central “exclusion system” and the establishment of a “safe server” which allows the authority to monitor compliance have been published.
Licensed operators will be allowed to advertise their offers according to the new rules of the ISTG 2021. Only advertising that adheres to the following principles will be allowed:
In addition to these principles, there are additional restrictions on specific gambling services or forms of advertising:
In addition to these rules, the licensing authority may include additional requirements regarding the type and scope of advertising in the license. This approach is intended to enable individual risk-based regulation.
The new licensing regime will be accompanied by new tax provisions.
Taxation for online poker and virtual slot machines will calculated on the basis of the money bet minus the virtual slot machine tax (assessment basis). The money bet includes all expenses incurred by the player to participate in the online poker or virtual slot machine game. For online poker that also includes all participation fees and all bets that are made in the course of any game. The tax amounts to 5.3 % of the assessment basis.
Taxation for sports betting will be increased from 5 % to 5.3 % of the relevant assessment basis. Everything else stays the same.
Taylor Wessing has been advising international and domestic clients in the field of online gambling for more than a decade. Our team has extensive experience in licensing procedures, compliance and tax advice regarding gambling offers directed at the German market.