Germany Publishes Details of New Treaty on Gambling Licenses

German flag waving in front of Reichstag building

30-second summary

  • New bill extends trial sports betting licensing regime
  • Vote likely on March 21
  • Regulator will have new powers, included banning unlicensed operators
  • Unexpected ban on advertising has been announced

Germany has just published a draft of its latest bill on gambling. The bill overhauls sports betting licenses, with a unified approach across all 16 federal states.

The current regulator will have its powers extended and is likely to start processing new applications for licenses before the end of March.

Details of the treaty

The Third German State Treaty on Gambling has been published in draft form. Its main aim is to amend the Interstate Treaty on Gambling.

The amendment will extend a trial that permitted gambling operators to open up business in Germany. The trial is due to expire on June 30, and licenses were issued to 20 operators.

The German state previously held a monopoly on all games of chance. The trial was to test how the German market would react to competition.

The draft bill extends the trial phases for another two years, to June 30, 2021. There is also the possibility to extend it three more years, to June 30, 2024.

Importantly, the bill will lift the cap on licenses for gambling operators, meaning the regulator can issue as many as it wants. Licenses are for both online and offline gambling.

The bill clarifies an additional range of issues related to sports betting. It will put clear rules in place for payment service providers. Sports clubs will also have guidelines on their conduct around sports betting, and there will be regulatory guidance for the media.

The legislation does not cover online casinos. However, the state of Schleswig-Holstein already has licensed online casino operators. The prime ministers are expected to discuss extending these until June 30, 2021.

Going to the vote

The prime ministers of Germany’s 16 federal states are due to meet on March 21 for their regular interstate conference. The draft treaty will be on the agenda for discussion and the prime ministers are expected to vote on it.

If they approve the treaty, the next step will be for some federal states to ratify it before December 31, 2019. Not all states will need to ratify the legislation, only those where the trial licenses are currently in effect. Once ratified, the treaty will go into effect on January 1, 2020.

The treaty will be ground-breaking if it becomes law, marking the first time that the federal states will have agreed to common legislation on gambling. It will clear a path to a unified approach to licensed sports betting across Germany.

Licensing

The regulator for the private market is currently the Gaming Board of the state of Hesse’s ministry for the interior and sport (Hessisches Ministerium des Innern und für Sport). The Gaming Board will regulate licensing across all of Germany if the draft treaty becomes law.

The Gaming Board is likely to open up applications for licenses as soon as next week’s vote is over. This will give it time to process applications so as to have licenses ready to be issued on January 1, 2020.

Unlicensed sports betting will be banned under the treaty. The board will gain new powers to deal with unlicensed sports betting operators anywhere in Germany. Operators who run both licensed and unlicensed forms of gambling will have their license revoked.

Unexpected ban on gambling ads

In a surprise move, the broadcasting regulator has announced a nationwide ban on gambling advertisements on the TV and radio.

The Media Authority of Hamburg Schleswig-Holstein (MA HSH) sent letters on February 25 to all broadcasters in Germany. The letters state that a ban on all gambling advertisements is in effect immediately.

The ban has required no new legislation. Wolfgang Bauchrowitz, deputy director and legal adviser for MA HSH, said in the letter that gambling advertisements are “allowed under current legislation.”

Most TV and radio stations have already complied with the ban. Bauchrowitz said the regulator has noticed that the number of advertisements has “significantly decreased” since the letter was sent. He added that some broadcasters had yet to comply, but could expect to face “administrative action” if they do not.

The ban has triggered shockwaves among German casino operators and the 20 currently licensed sports betting operators. They have relied on broadcast ads to generate custom.

With Germany on the cusp of further liberalizing sports betting, it remains to be seen how the ban will play out in the long term as multiple new gambling operators set up shop in the country.