German States Approve New Federal Gambling Treaty

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Ministers of the 16 German federal states have given their approval to a new federal gambling treaty that extends gambling licenses into 2021.

30-second summary

  • New gambling legislation in Germany extends the trial period of sports betting licenses into 2021
  • It also raises the cap on the number of licenses the authorities can issue
  • This bill has been approved by the prime ministers of the country’s 16 federal states
  • Some parties believe this bill does not do enough to reform Germany’s gambling scene

Details of this gambling treaty

In early March, a new gambling bill was published in Germany, completely changing the way the country deals with sports betting licenses. It would require an identical approach to gambling in all 16 of the country’s federal states.

This legislation is known as the Third German State Treaty on Gambling. Its goal is to amend the Interstate Treaty on Gambling.

One of the key aspects of this new bill is extending the trial period for those who want to open a gambling business in the country. There were 20 operators in this trial and the expiration date was June 30. In previous times, all games of chance were offered by the state monopoly.

A trial period was set up to see how introducing competition would affect the market. This new bill calls will extend this trial period for another couple of years, to June 30, 2021. Some are even calling for the extension to go on for an additional three years beyond that, bringing it up to June 30, 2024.

There would also no longer be a cap on the number of licenses in the sector. The licensing authority could issue as many licenses as it wants for both retail and online gambling. Also, certain aspects of the rules and regulations for sports betting were clarified.

Payment providers are given more clear-cut guidance. Sports organizations have more direction as to how they should deal with sports betting. There are even guidelines for the media as part of this bill.

Online casinos

There is no mention of online casinos in this legislation. One of the states, Schleswig-Holstein, already issues online casino licenses. About 24 licenses were issued by the northern state in 2012. There are talks of an extension for these licenses until June 30, 2021.

The license expiration date has come and gone, but it will now be extended until 2021 with this federal stopgap treaty. The states are happy with this new treaty because it recognizes their right to pursue legal online casinos, as long as they provide “a legally sound base that guarantees security of cash flows while protecting the consumer against data misuse and addiction.”

Result of the vote

There was a vote on this bill on March 21 during an interstate conference of the prime ministers from all 16 federal states.

The ministers approved the measure. This means that the big decision about the permanent makeup of the gambling sector in Germany will not have to be dealt with for another couple of years.

The conference in Berlin resulted in the extension until June 30, 2021. Operators will be able to apply for licenses at some stage during 2019, and the new licenses will be valid starting on January 1, 2020.

The European Commission still needs to approve the measure. The EC has not always been forthcoming when it comes to the liberalization of gambling in Germany. While there is no longer a cap on the number of licenses they can issue, there is still no allowance for online casinos.

The German Sports Betting Association is not happy with the new bill. The organization says that the structural deficits of the last treaty were not addressed and wants negotiations to continue for a fundamental reform of gambling regulation in the country.

The continuing ban on live betting is particularly irksome. This is a market that usually makes up a significant percentage of the total bets on sporting events. The monthly cap of €1,000 (£858) on bettors will also not go down too well.

Some of those in the lottery space in Germany believe not enough is being done to deal with offshore online gambling operators who specifically target people in Germany. They are calling for harsher measures against those operators.

Gambling advertising ban

Another significant move in 2019 for the German gambling sector is a national ban on radio and television advertising of gambling. A letter sent on February 25 from the Media Authority of Hamburg Schleswig-Holstein to broadcasters discusses the ban, which kicks in immediately.

There is no need for legislation on this ban. Most networks are complying with it. Those who have not done so to date could face administrative action if they continue to resist. Despite the federal treaty being a good thing for the gambling sector in Germany, many see this ban on gambling advertising as being a backward step.