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