Hesse drafts new State Treaty ahead of German Ministers’ conference

The Ministry of Interior and Sport of the German state of Hesse (HMDIS) has published a new draft State Treaty on Gambling as it continues to lead efforts to establish a viable regulatory framework for gambling in Germany.

Publication of the draft bill comes ahead of tomorrow’s meeting of Germany’s state Minister Presidents, with Hesse Interior Minister Peter Beuth explaining that his state released the draft now to ensure it goes through the appropriate legal channels.

The Minister said that the key goals of the existing State Treaty, such as the protection of minors and combating gambling addiction, cannot be achieved in the Treaty's current form, or by making amendments to the legislation.

Beuth believes that the current situation has reached an impasse, leaving Germany with a lack of effective regulatory controls and numerous legal challenges to contest.

“This blockage has resulted in the issuing of sports betting concessions being impossible, showing that urgent action is required,” Beuth said. “Sports betting providers can be aware of their responsibilities such as combating addiction, consumer and minor protection, yet still not work towards these aims.

“It is an intolerable situation in which the states cannot enforce the laws they have agreed themselves because of various disagreements. We cannot assume that any providers in the market will adhere to the rules in this legal limbo – an untenable state of affairs.

“Therefore we need to create a new treaty in which a free but regulated market is established.”

Beuth argues that the Hesse proposal first put forward in October last year “creates a transparent, non-discriminatory and European law-compliant framework”. “It will end the current limbo by resolving the failures of the old treaty. It’s time for a fresh start,” he says.

The draft State Treaty on Gambling, which would significantly liberalise Germany’s gambling market and establish a new regulatory body, the Joint Supervisory Authority, will be discussed at the Minister President Conference tomorrow (March 17th).

The draft Treaty makes five key changes to the existing legislation, most notably the legalisation of online poker and casino games. HMDIS argues that this is necessary as players will simply turn to unregulated sites to access these games if they remain prohibited.

It also proposes to scrap the limit on licences, which has caused the current impasse in the concession process. Beuth says that by lifting the current limit of 20 licences it will be possible to regulate the market on a qualitative, not quantative basis, while ensuring that only the most reputable companies are approved to operate. This would also create a legal system that Hesse believes could not be interrupted by legal challenges.

Players would be allowed to place bets of up to €1,000, while the monthly limit of €1,000 on amounts wagered would be replaced by a loss limit of €1,000. Provided players can prove their creditworthiness, they should be allowed to place higher bets, while the registration process will be significantly simplified in order to avoid unnecessarily pushing players away from the legal offering.

The controversial regulatory body Glücksspielkollegium will also be replaced with a public institution working under the German Finance Ministry, described as “a legally independent” body to be established with the cooperation of all states. The process of awarding operating licences would be handled by the states on a rotating basis. This creates a central point of contact with regards to gambling in Germany, Beuth says.

Finally, all gaming machines in Germany would be required to be connected to a central server, allowing the authority to monitor play across the country and gather data on the market.

Crucially, Beuth says, the draft Treaty has been designed to avoid infringing on the business of Germany’s powerful state lottery bodies.

“The State Lottery monopoly is not touched by our proposals,” he says. “It is now up to [the states] to achieve the objectives of the State Treaty, in particular the prevention of the manipulation of sports and fraud.”



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