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German Licensing Woes Frustrate Regulated Online Gambling
By Shane Addinall Apr 16, 2022 IndustryOnline gambling in Germany is failing. A year from its formation and the newly regulated market has no new online casinos, no new poker rooms, and no new sports betting sites. What has gone wrong?In an interesting turn of events, Germany has failed to entice online gambling operators despite creating and launching its legal gambling framework nearly a year ago.
At the time, Mathias Dahms, president of the betting trade association, DSWV, said:
“This is the beginning of a new age of gaming regulation in Germany. After sports betting, the federal states are now rightly regulating further online games of chance in order to finally control what is happening on the market.”
This expansion, however, has not been the reality for the ailing regulator. In contrast, most of its peers have historically seen a flood of submissions to be approved for an online gambling licence long before launch; German applications are non-existent.
Legal Gambling Framework for Germany
In April 2021, the German government announced the approval of the Fourth Interstate Treaty on Gambling. This treaty is the foundation of the country’s multi-license gambling law which came into force on July 1st, 2021.
The new gambling act allows legal online casinos, online poker rooms and online sports betting across thirteen of the region's sixteen states. With the Saxony-Anhalt being designated the seat of the new regulatory jurisdiction.
Despite the official launch of the cross-state Joint Gaming Authority of the States (GGL) only being slated for 1 January 2023, Saxony-Anhalt has acted as the region’s temporary regulator since the launch of the gambling act.
Regulated Gambling Lacks Lustre
According to a recent report by Saxony-Anhalt officials, there have been zero applications for new online casinos, Online Slots, and online poker licenses. We confirmed this fact in-house by downloading the GGL “White List" from their official website, which shows no online poker rooms or online casinos dedicated to licensed operators.
It has been postulated that the country’s strict controls are why online casinos and online slot rooms are not applying for a license. The German gambling act limits maximum stakes per spin to online €1 with a protracted spin speed of five seconds per game.
Not only that but table games, which are very popular in Germany, are dealt with under separate regulations. However, these regulations favour state lottery providers limiting the ability of online casinos to attract and entertain local players.
The impact of these limitations is further compounded by a 5.3% revenue-based tax that is exclusive to online slots and online poker providers.
Radical Changes Required
The one hope for Germany's fledgling gambling jurisdiction is the upcoming draft of the racing betting and lottery law.
Mathias Dahms spoke out, saying:
“… Germany becomes a wrong-way driver in tax policy. We, therefore, appeal to the members of the Bundestag not too hastily wave through the draft of the racing betting and lottery law, but to deal with the issue in greater depth in the coming electoral term.”
He hopes that by correctly addressing the upcoming gambling reform in these segments, those changes can be rolled out to online casinos, online slots, and online poker.
Dahms finally added:
"Because in the end, only the black market profits from this.”
Successfully refreshing the gambling law to increase its appeal to operators while protecting players must become the government's focus if they ever hope to grow the market, as we have seen in Sweden, the Netherlands and surrounds.
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