Germany’s Gambling Market: A New Era of Regulation and Opportunity
For years, Germany’s gambling regulations faced intense scrutiny from gambling associations and the European Union alike. Disagreements among German states even led to one state pursuing its own path, including regulation and liberalization. However, with the expiration of previous licenses, the states agreed on a revised law, which took effect on July 1, 2021. Now, uniform rules apply across Germany, and the German Interstate Treaty on Gambling has opened up the market.
Licensing: The Foundation of the Regulated Market
The cornerstone of this new regulation is the issuance of licenses. All licensed and legal providers are listed on a publicly accessible “whitelist.”
The evaluation process for obtaining a German market license is rigorous and thorough. Providers must prominently display their state authorization on their website’s homepage. The whitelist is regularly updated to reflect the current status of licensed operators.
Germany’s gambling market operates under strict guidelines. Policymakers prioritized enhanced player protection and market access for foreign providers when creating the new Interstate Treaty on Gambling. Consequently, gambling is only legal under state supervision and control, after applicants meet all necessary criteria.
The Joint Gambling Authority of the Federal States: A Central Hub
A dedicated authority oversees the evaluation process. Established after the new regulations were enacted, the Joint Gambling Authority of the Federal States is based in Halle (Saale). The 16 German states have delegated their responsibilities to this authority.
The authority’s jurisdiction extends to gaming arcades, lotteries (both small and large), horse race betting, and online casinos, including online slots and poker.
Its core functions include regulating the interstate gambling market, particularly the licensing and supervision of interstate offerings in Germany, especially those online. The Joint Gambling Authority of the Federal States also monitors compliance with legal provisions, promotes responsible gambling, and prevents gambling addiction.
High Hurdles for License Applicants
Germany’s licensing requirements are known for their stringency. However, the effort is worthwhile, as it grants access to the lucrative German market. The Joint Gambling Authority ensures that all legal providers adhere to measures protecting players from addiction and manipulation. Failure to comply can result in license revocation.
The objectives of the regulation are detailed in the new German Interstate Treaty on Gambling. It outlines measures for preventing problematic gambling, such as self-exclusion programs and advertising restrictions.
The law also regulates all forms of gambling, including casino games, sports betting, online gambling, and traditional land-based casinos.
Combating illegal gambling is addressed in the law, as is the distribution of tax revenues among the individual states. Crucially, the law aims to prevent minors from accessing gambling.
OASIS, a player blocking system, is a key tool for achieving these goals and a significant innovation of the new German Interstate Treaty on Gambling.
Five Distinct License Types
Currently, several types of internet licenses are available for application in Germany. These include:
- Virtual slot games and online poker
- Sports and horse race betting
- Nationwide lotteries
- Class lotteries
- Commercial game brokerage in multiple states
Each license category requires a separate application and approval. Providers can apply for multiple licenses simultaneously. The admission criteria include:
Applicants must have their company headquarters in a European Union member state or a state party to the Agreement on the European Economic Area.
The application must be in German; if not, a certified German translation is required. The company must provide all company data, a criminal record certificate, and proof of no outstanding tax debts. Applicants must also have at least two years of experience in the industry and demonstrate the necessary financial resources and their origin.
The state requires a security and payment processing concept, as well as concepts for IT security, anti-money laundering, youth protection, gambling addiction prevention, sales, advertising, and all compliance requirements. These measures protect consumers and ensure fair and responsible gambling practices.
Providers must verify the identity of their players, adhere to deposit limits, offer game breaks or self-exclusion options, and implement measures for responsible gaming and anti-money laundering. Minors must be denied access. Furthermore, providers must be able to implement applicable data protection laws.
In summary, this comprehensive package of measures aims to ensure compliance with legal requirements. Those who successfully navigate these hurdles gain access to Germany’s multi-billion-euro gambling market, which generated over 17 billion euros in revenue in 2022. Other European countries now recognize the German gambling license, allowing operators to offer their services without obtaining a separate license. Inclusion on the Joint Gambling Authority of the Federal States’ whitelist benefits all parties involved.
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