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Germany prepares to ratify new State Treaty on Gambling

Germany is stepping up efforts to bring its State Treaty on Gambling into compliance with European law, with a new draft bill published by Berlin's State House of Representatives with a view to coming into force in January 2018.

This second State Treaty looks to introduce a number of amendments to the 2012 Revised State Treaty, which was derailed by legal challenges over a lack of clarity in the licensing process and its non-compliance with European law.

Rather than embarking on a total overhaul of the legislation, the latest bill is described as "a selected amendment" of Germany's gambling laws. This is designed to quickly allow for the "overdue regulation of the sports betting market" and to provide clarity for providers and third parties.
The draft legislation removes the 20 licence cap on sports betting concessions, one of the most controversial aspects of the previous legislation, and allows for an unlimited number of licences under "an extended experimental phase".

This will allow all operators who were initially approved by the Hesse Ministry of the Interior and Sport to launch a licensed offering - 35 operators in total - subject to payment of a €2.5m security deposit.

The draft legislation also gives the authorities in Hesse the power to scarp the amended Treaty after its first full year in force. This break clause would be available to Hesse in the event that Germany’s 16 federal states fail to reach a consensus on a more permanent regulatory system by June 30th, 2019.

Under the amended State Treaty, Hesse will also lose its role as gambling regulator and licensing authority, with these powers transferred to the states of Nordrhein-Westphalen and Sachsen-Anhalt.

The amended legislation was agreed to by the Minister-Presidents of German states at a conference in October 2016 and notified to the European Commission in November. It must now be ratified at the next meeting of the state heads, due to take place on March 16th.

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