Having served as the responsible authority for Germany's failed sports betting licensing process for the past four years, the Hessian Ministry of the Interior and Sport (HMDIS) has opened its own route for sports betting operators to launch their services.
Using a temporary authorisation measure known as "Duldung" (English: Toleration), Hesse will allow operators to offer sports betting via the internet in return for the payment of taxes.
The terms of the Toleration have been set by the Regional Council of Darmstadt, where Hesse’s gambling supervisory body is based, with operators given a deadline of November 15th, 2016, by which to apply for authorisation.
Similar to a licence, applicants will have to prove that they can meet the conditions originally required by the second stage of the licensing process set out in the State Treaty on Gambling.
The State Treaty came into force in July 2012, although no sports betting licenses have yet been issued under the legislation due to legal challenges by operators and criticism by the European Commission, which considers the Treaty to be in breach of EU law.
Toleration applicants must prove that they are already paying taxes as required by the Treaty, or submit to immediately begin paying taxes, together with a security guarantee of €367,900 in the form of a bank guarantee from European Union or European Economic Area-based financial institutions.
Commenting on this latest development, leading German gaming lawyer Dr. Wulf Hambach told Gaming Intelligence that operators should be aware that the Toleration is not a licence or an entitlement to a licence, and may cancelled at anytime.
Operators who continue to operate in Hesse without securing this authorisation will be liable to fines of up to €500,000.