Germany: Licensing procedure for online gambling in Germany starts

Licenses issued under the new Interstate Treaty on Gambling will be valid in all of Germany.

s of 1 July 2021, the long-awaited Interstate Treaty on Gambling (ISTG) 2021 entered into force across Germany. It includes new licensing possibilities for sports betting, virtual slot machines, and online poker for private operators. Additionally, the ISTG 2021 will include new rules for advertising. Licenses issued under this new regulation will be valid in all of Germany.

Furthermore, there will also be a new (controversial) tax regime for sports betting, virtual slot machines, and online poker.

Moreover, this year kept the courts busy with recovery claims by players arguing they deserve compensation for their lost money due to the illegality of gambling.

The new ISTG 2021

The ISTG 2021 allows private operators to apply for licenses to offer sports betting, virtual slot machines (online simulations of terrestrial slot machines), and online poker. Licenses will be valid for a period of five years. The regulation does not include online casino games. These are defined as virtual simulations of casino games (such as Black Jack and Roulette) and live broadcasts of terrestrially conducted casino games with the possibility of participation via the internet. The possibility of obtaining a license for online casino games will be subject to separate laws of the individual federal states. Likely, the legislators will model the laws on the specifications for a license to operate a land-based casino.

The requirements for obtaining a license to offer online sports betting, virtual slot machines, and online poker are very similar and only vary in specific topics. The main aspects of the common requirements cover the following:

Security deposit: The applicant must provide a security deposit of at least EUR 5 million. In individual cases, this amount can be increased up to the amount of the expected monthly average turnover (maximum EUR 50 million).

Provision of online gambling offerings: To the extent different online gambling offerings are provided via the same internet domain, the operator must provide an independent and graphically separate area for each form of gambling. The division also prohibits cross-advertising. A player must not play in different areas simultaneously.

Upon registration on a website, the player must set a monthly deposit limit of a maximum of EUR 1,000.00. The limit applies per player and not per provider. This means that, generally, a player may spend EUR 1,000 per month across all gambling platforms.

The competent authority will monitor compliance with the EUR 1,000 limit via a central “limit control database”. Providers must pay a fee to connect to and use the limit control database.

With regard to online sports betting, the authorities allow more flexibility than under the current regime. Bets will be allowed on the outcome of a game as well as on events during the game or a combination of both. Also, live bets will be allowed under specific requirements.

For virtual slot machine games, there is a minimum time per game of 5 seconds and a maximum bet of EUR 1.

Additional specific rules e.g. on KYC for players, exclusion of minors and self-exclusion rules apply. 

As per the end of May 2021, the technical guidelines for access to the “limit control database”, a central “exclusion system” and the establishment of a “safe server” which allows the authority to monitor compliance have been published.

Specifics with respect to the license application

The gambling authority in the federal state of Saxony-Anhalt becomes the competent authority for the nationwide licensing process. The authority finally released the specific licensing conditions for virtual slot machines and online poker, which define the generic requirements deriving from the ISTG 2021 in more detail. Casino games, such as blackjack or roulette, are not covered by the licensing conditions.

This article excerpt is a reprint from YogoNet International. To view the entire story, comment and share, click here.

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