New German Gambling Regulation Is More Bitter Than Sweet

At first glance, the fact that lawmakers have voted to allow online gambling in Germany was cause for celebration. Players who have been limited to playing via Schleswig-Holstein states, or were using unlicensed international sites, will now be able to play safely and legally in their home state.

While this is great news for players a deeper analysis of the 70-page thick ‘State Treaty on Gaming Regulation’ revealed some areas of concern, both for local parties interested in a strong gambling market and potential international casino operators.

Payments Is It Financially Viable?

The Treaty, which is set to come into effect July 1st, 2021, imposes a series of deposit and betting limitations on both players and operators which seem both arbitrary and more likely to destabilise the regulated market then protect players from abuse.

Here are three key limitations which will do more harm than good to the fledgeling legal online casino industry:

Detrimental Deposit Limits: The policy calls for a monthly player deposit limit of €1000 across all operators. This figure is not based on any statistical data and certainly does not consider the lifestyle and financial situation of the individual. Nor does the document address how various casinos are intended to share this private financial information with one another while securing their data and remaining competitive in the marketplace.
Lacklustre Slots Entertainment: The Treaty calls for online slot betting to be limited to a minuscule maximum wager of €1 per game. Even the UK dropped their limit to £2 and then only on physical pub machines, casino slots were exempt. This broad-based approach makes the slots at legal online casinos unattractive to players and potentially harmful to regulated casinos profitability.
Forced Timeouts: The Treaty also requires a forced lockout of 5 minutes between leaving one gaming site and logging into another. While slots will be required to spin a minimum of 5 seconds per game. These timeframes are completely at odds with how people use the internet every day where speed is of the essence.

Both of the above limitations could see casinos choose to become black-market operators simply to ensure that Germany remains a profitable market for them to operate in.

Worldwide Into The Arms Of The Enemy

We all know that gambling is a hobby, however, it is a hobby that is underpinned by the thrills and excitement of betting and winning real money. For players of means and fans of the hobby who manage their budgets, the thrill of spinning €1 slot machines simply won’t be there.

Maarten Haijer, Secretary-General of the European Gaming and Betting Association said:

“This is a positive development towards bringing Germany’s gambling regulation into the 21st century. The challenge will be to deliver a new regulation which is fit for the digital age we live in, which provides a safer gambling environment for consumers and enables a well-regulated and well-channelled market.”

The primary concern here is Germany’s low channelling percentage. Düsseldorf Institute for Competition Economics (DICE) estimates that less than 2% of all German online gambling is channelled via a legal online operator.

The implementation of the listed limitations as per The Treaty could very see this percentage drop even lower as currently licenced operators leave the market in the face of reduced margins and declining player interest.

With bodies such as German Sports Betting Association (DSWV) and the European Gaming and Betting Association (EGBA) expressing their concern over these issues and encouraging the various lawmakers to reconsider these limitation taking into account lifestyle, demographics and daily internet usage we can only hope they make the changes necessary to see Germany become a bastion of good gambling practices.