Gambling Regulation in Germany - 2023

Introduction

• Presenters: Tim Pool (Editor, Gambling Insider) and Jörg (Past President, IMGL; Partner, Melcher's Law)
• Context: Discussion at ICELAND 2023 regarding recent changes in Germany's gambling regulation

New Era in Gambling Regulation

• Start Date: 1st January 2023
• Regulator: Gemeinsame Glücksspielbehörde der Länder (GGL)
  • Took over all sectors of online gaming
  • Replaced the regional council in Darmstadt
  • Referred to as “super regulator”
• Basis: Interstate treaty signed by 16 German prime ministers
• Scope: Nationwide authority over licenses

Positive Changes in Regulation

• New Regulator: Building from scratch with new personnel
• Pro-Industry Attitude: Responsive and supportive
• Historical Period: Licensing procedures started in July 2021
• Interim Phase: GGL formerly known as the state administrative office
• Engagement: Improved dialogue and responsiveness from regulators

Core Issues Addressed

• Whitelist Implementation: List of licensed operators and brands
• Licensing Procedures: Ongoing but set to complete soon
  • Requires bank guarantee (minimum of €5 million)
  • Application status crucial for payment processors and game suppliers
• Transitional Regime: Applies discretion for operators awaiting license
• Gray Areas: Unofficial “gray list” for compliant operators still waiting

Broader European Context

• Common Issues: Reputation, political perception, and advertising concerns
• Case Examples:
  • Netherlands: Massive advertising led to potential ban on non-targeted advertising
  • Deposit Limits: Germany has a tiered system for sports betting
  • VIP Players: Monitoring individual behavior could be more effective than rigid deposit limits

German Regulation Specifics

• Server Systems: Monitoring gambling activity and deposits
  • Activity files, limit database, and SAFE server
  • Technical guidelines pending, software development needed
• Evaluation of Interstate Treaty: Ongoing assessment of effectiveness
  • Market competitiveness and protection issues
• Tax Rates: RTP adjustments leading players to black market
• Monopolistic Practices: Issues with limited licenses for table games (e.g., roulette)
  • Comparisons to other EU countries (Belgium, Switzerland)

Future Directions and Challenges

• Adapting to Technical Guidelines: Industry needs 6-9 months post-publication to comply
• Litigation Risks: For rejected applications
• Channelization Goals: Ensuring players remain in regulated markets
• Political and Social Factors: Impacts of advertising and market perceptions
• Monopoly Concerns: Needs to be addressed for fair competition

Conclusion

• Growth Outlook: Optimism for positive regulatory support
• Compliance Importance: Value of being a licensed operator in the German market
• Final Note: “The train has left the station” – regulation is moving forward positively