The new draft of the German State Treaty on Gambling, which was provisionally approved by the country’s 16 states over the weekend, has been met with bemusement by politicians and the industry.
The draft includes unanimously welcomed proposals such as establishing a national gambling regulator for the first time with wide powers to police the market and combat unlicensed operators, together with proposals that critics say demonstrate a complete lack of understanding of modern consumers and technology.
The proposed treaty would end Germany’s long-running but ineffective prohibition of online casino gaming by allowing a national regulator to issue online casino licenses to operators, but also allows each state to decide what online gaming is allowed.
The draft restricts online gaming to slots and poker and gives states authority to approve other casino games such as roulette and blackjack, while live sports betting would only be allowed on very limited markets such as the next goal.
“The decision to finally abolish the ban on online gambling and issue permits for virtual slot machines is a long overdue step in the right direction,” said Dr. Dirk Quermann, president of the German online casino association Deutscher Online Casinoverband (DOCV).
“But why then are other online casino games like roulette once again treated differently on the internet. It is difficult to understand the federal state’s boundaries.”
Quermann added that giving individual states authority over online casino games will only create new state monopolies in a digital world, but stressed that he would have to carefully examine the detail of the proposal before making a final assessment.
That sentiment was echoed by German sports betting association Deutscher Sportwettenverband (DSWV).
“The federal states have presented a highly complex, almost 70-page regulatory framework that first requires our intensive analysis to determine its full scope,” said DSWV president Mathias Dahms.
Dahms welcomed the progress towards better regulation of the market explained that his early conclusion is that the restriction on live betting endangers the goal of channelling consumers to a legal and regulated offering because 60 per cent of all betting is in-play live betting.
“Disappointed consumers will turn to black market offerings that don’t comply with legal requirements,” he warned.
He also questioned whether the proposed cross-operator €1,000 a month deposit limit for players would achieve its goal of reducing problem gambling, and said that the proposed five-minute wait time for players switching sites “completely ignores the reality of life for consumers in the digital age”.
There was also a mixed response from lawmakers, with Schleswig-Holstein state chancellery secretary Dirk Schrödter (CDU) hailing the agreement as a breakthrough and a really good result, while a CDU spokesperson conceded that there is a need for improvement, particularly around live betting. The CDU’s partner in pushing for a better regulated gambling market went further, warning that no deal is better than a bad deal.
“It should remain our goal to get nationwide gambling regulations. But that is not possible at any cost,” said Jan Marcus Rossa, the FDP spokesperson for gaming policy.
“We Free Democrats welcome the fact that nationwide regulations for online gambling are finally emerging. Without question this is an important step in the right direction, paving the way for future suppression of the illegal online gambling market in Germany.
“However, we must not overlook the fact that the current draft does not meet our expectations in all areas and falls short of the state parliament resolution of 2017.”
Schleswig-Holstein broke away from the State Treaty in 2017 to pursue its own gambling policy that already includes live betting and online casino.
“This applies in particular to the topics of monopoly, access restrictions and online casino as well as the goal of achieving equal regulatory treatment for all online forms of gambling,” Rossa said. “We are critical of the treatment of live betting and data protection aspects of the proposed cross-provider player accounts (€1,000 limit files).”
The FDP is urging the Schleswig-Holstein parliament to quickly consider the proposal and make changes during the upcoming consultation process to align the proposed state treaty with the regulations of the state, or else continue alone.
A spokesman for the Schleswig-Holsetin parliamentary group of Alliance 90 / The Greens added: “The breakthrough in the state negotiations is a huge step towards successful regulation.
“Liberalisation combined with strict but balanced regulation could enable us to achieve what other countries like Denmark have already done: to largely displace illegal offers in favour of a safe and regulated gambling offer.”
Gaming Intelligence
LAWMAKERS IN WASHINGTON STATE HAVE INTRODUCED TWO DIFFERENT BILLS TO AUTHORIZE SPORTS BETTING IN THE STATE.
The first bill HB2478 (companion bill S6277) was introduced by Representative Brandon Vick late last week and would authorize sports betting at tribal casinos, card rooms and racetracks.
Under the proposed bill, an operator may accept bets on sports events from players over the age of 18 that are physically present in a retail sports betting lounge, or via self-service betting machines or an online sports pool.
Each tribal casino and sports betting licensee may provide no more than one branded sports betting website, which may have an accompanying mobile application bearing the same brand for an online sports pool.
A sports pool must be operated in a retail sports betting lounge located at the tribal casino, card room, or racetrack complex, while operators can only launch online once a retail betting lounge has commenced operation.
Licensed operators may provide promotional credits, incentives, bonuses, complimentaries, or similar benefits designed to induce sports betters to wager. The server or other equipment used by licensees to accept wagers at a sports pool or online sports pool must be located in that tribal casino, card room, or racetrack complex.
The Washington state gambling commission will have the authority to charge a card room and a racetrack a fee for the issuance of a sports wagering license in an amount of $500,000 for the initial issuance and “a reasonable fee” in the case of a renewal.
Every tribal casino and sports betting licensee will pay a tax of 10 per cent of net gaming revenue to the state.
A second bill HB2683 (companion bill SB6394) would authorize sports betting on a very limited basis by restricting it to tribal casinos in the state.
Upon the request of a federally recognized Indian tribe in the state, the tribe’s class III gaming compact must be amended pursuant to the Indian gaming regulatory act.
This will authorize the tribe to conduct and operate sports wagering on federal Indian lands, provided the amendment addresses how sports wagering will be conducted, operated, and regulated.
Both bills, HB2478 and HB2683, have been read for the first time and referred to the Committee on Commerce & Gaming for further approval.
Gaming Intelligence