In Germany, the iGaming scene is undergoing several changes, and they are expected to be some big ones in the coming years. There are strict limits to be implemented on how much people can stake online. This has caused the iGaming industry to consider the wisdom of operating within the country seriously.
Issues of what constitutes an approved license have also cropped up. The state of Schleswig-Holstein has been very welcoming to the best online gambling operators. However, the insistence on punishing institutions that partner with online gaming companies has had consequences for businesses that received licenses in the Schleswig-Holstein.
Despite the successes of these attempts, casino advocacy groups are attempting to force legislators to crackdown even harder. In this article, we explore the current trends in Germany regarding iGaming and what the future holds.
Overview of iGaming Scene in Germany
Land-based gambling has been legal in German for a long time. Germans can go to brick and mortar gambling establishments with no issue. Whether it is slots or table games, you can find them across the country. Each Bundesland (state) supervises its own specific rules and regulations. The ministry of interior in each of these states handles the monitoring of land-based gambling.
Yet things are not even close to being so easy in terms of virtual gambling. According to regional treaties on gambling, online versions are completely forbidden. However, the people of Germany still wish to gamble on the internet and so use unregulated websites available to them. A survey conducted last year showed that the majority of Germans believe the country needs to change its gambling laws.
Reasons Why German Casino Group Wants Changes
In the University of Hohenheim in Stuttgart, Forschungsstelle Glücksspiel – Germany’s Gambling Research Center (GRC) released recommended updates for this reform. The recommendations by the GRC are very robust and persuasive about the need to create a properly monitored gaming industry. Its report even acknowledges the rampant availability of illegal online casino games.
The Gambling Research Center reported that land-based casinos generated $671.9 million gross revenue in 2017 while paying $353.13 million in casino and sales taxes. Meanwhile, the online market, considered illegal, generated about $1.94 billion within the same period and paid only value-added tax of $369.7 million. If they had been made to pay the same taxes as the land-based counterparts, their taxes would have been $1.012 billion.
Germany’s lax criminal code when it comes to gambling lets a lot of illegal online gaming businesses flourish. Without a license for land-based gambling, a company could be charged with a criminal offense. his criminal code makes no stipulations for online gambling yet, and this needs to be resolved. Furthermore, the assumption is that some Bundesland will keep being lax about online casinos. This is why the government needs to step up and protect players from an unregulated market.
The Prognosis for Online Casinos without a German License
The insight obtained from the survey stated that the German government needs to reform its gambling laws may well lead to progress. iGaming Business reported that the GRC’s recommendations would implement taxes on unlicensed gambling operators. They also recommend legislation on iGaming, though there would be strict rules they have to abide by. The GRC also requests that states establish new regulatory bodies dedicated to regulating this industry.
Though the plan is very progressive, it seems the GR is not too fond of poker. It states that the game should be banned completely because poker is susceptible to “fraud and manipulation”. It also recommends that casino advertising of any sort must be banned. These two motions will probably be met with a lot of opposition.
These inputs are expected to be incorporated into Germany’s third amended state treaty, which had been ratified in early 2019. This amended version is just supposed to be a placeholder until June 2021 when a more permanent treaty will be instituted. The current temporary rules have allowed license applications since January 2020.
However, online gambling operators are restricted to providing sports betting without in-play. Additionally, there is a €1,000 spending limit and a 5% tax turnover placed on players each month. Apart from the GRC, the German Sports Betting Association (DSWV) and Deutsche Automatenwirtschaft (DAW) slot association have proposed their own ideas.
The DSWV supports a complete overhaul of the current system and the creation of an expanded market. They stated that research suggests that online gambling is no more dangerous than other forms.
Meanwhile, the DAW wants the offer of multiple game verticals to be permitted. They do not have an issue with complete state control on draw-based games.
Change Just Might Be Coming
Though what the government might decide on may not be exactly what the people or casino groups want, it will be a welcome change. There are so many risks involved in using unlicensed online gambling operators, and people need to be protected.