Germany’s Gambling Reforms: A Look at the New Interstate Treaty and Its Implications

As the centuries passed, gambling evolved into a more structured format becoming more than just a way to pass time. The implementation of advanced technologies like AI and blockchain is expected to enhance the user experience, further boosting market growth. Licensed operators are capitalizing on these trends, offering diverse gaming options to capture a broader audience and maximize revenue potential. This section will provide an overview of the market, including the legal situation of gambling operations, player preferences, and historical context. Yield Sec’s technology, meanwhile, has tracked around 1,380 illegal operators targeting players in Germany and supported by around 514 affiliates, representing 45% of affiliates active in the country. Most recently, Yield Sec charted an 11% growth in the illegal market in Germany, giving it a 47% share of the total marketplace for online betting and gambling, compared to 53% legal.

• But Hembury believes the GGL will implement new regulation into the updated Interstate Treaty, to avoid the legal blocking of this measure in future.
• Typical requirements include criminal record checks, tax clearance certificates, CVs and evidence of professional expertise, including training certificates.
• Licensing across Germany is a big change from the old laws which were often restricted elements of online gambling to the German state of Schleswig-Holstein as the state issued several gambling licences to companies operating online when other federal states did not.

Both measures prevent the licensed sector from being able to provide a competitive offer against black market operators, but are being reconsidered by the GGL as part of its regulatory evaluation. The Interstate Treaty on the Protection of Minors (JMStV) is a state treaty between all German states and regulates the protection of minors in the field of broadcasting and telemedia. In contrast to the JuSchG, the current version of the JMStV does not provide for a gradual age rating. Nevertheless, even within the scope of application of the JMStV, the provider must ensure that offerings that impair development cannot usually be perceived by young people in the age group concerned. This can be achieved, for example, by restricting broadcasting time or by technical measures.

Additionally, a EUR 1,000 monthly deposit limits on all products and operators will be implemented, alongside a EUR 1 limit per spin on any online slot games. Responsible gambling also means ensuring that minors and barred players do not participate in gambling activities. Key requirements to ensure protection of minors and individuals susceptible to problem gambling are checking the players’ ID, age verification and matching them against the public player-barring database (referred to as “OASIS”). Interacting with OASIS is mandatory for any licenced operator (with the exception of lotteries).

Games of chance are defined as games where payment of consideration is required in order to acquire a chance to win and the determination of winnings is entirely or predominantly a matter of chance. Any gambling activity falling within this definition is subject to specific gambling legislation. Either the Ministries of the Interior or Regional Council authorities are the authorities responsible for licensing and supervision of their local state lottery company. Betting shop licences have to be applied for at state level with the locally responsible regulator. Operators should also consider offering personalized customer support to strengthen players’ connections to the casino, contributing to long-term loyalty.

Main provisions of the Interstate Media Treaty

By focusing on localized and personalized marketing efforts, you can effectively capture the attention of the German gambling population. With little hope of achieving significant change until 2027, however, the goal in the short-term will be to keep up the political pressure for better regulation and an effective crackdown on the bullish black market. Schnabl also noted that while the prevalence of the white market was diminishing over time, the presence of the black market was growing. All institutions, educational institutions, youth organisations, associations, companies and private individuals are invited to actively participate in Safer Internet Day. All activities related to Internet safety can be entered in the klicksafe event overview. In addition, all interested parties are cordially invited to follow the diverse information online, for example, under the hashtag #SaferInternetDay, to like and share posts or to create their own posts and thus help to raise awareness for topics around a better Internet.

To apply curacao casino license for a gambling licence, operators must first decide which licence they require, whether for sports betting, virtual slots, or other forms of gambling. Since 2023, the Joint Gambling Supervisory Authority (GGL) has been responsible for issuing licences across all federal states, unifying the previously fragmented system. For sports betting and horse betting, applicants need to provide detailed information about the types of games offered, their operational structure, and the measures in place to protect vulnerable players. Coming into effect on July , the German Interstate Treaty on Gambling will change a few key elements of the law. This includes a brand new licensing regime for poker, slots, sports betting and advertising.

The federal states Schleswig-Holstein and North Rhine-Westphalia have already stated that they are planning to issue licenses to private operators. Likely, the legislators will model the laws on the specifications for a license to operate a land-based casino. The Interstate Treaty 2021 changed this fundamentally and finally introduced licences for virtual slot machine games, online poker and online casino games. Limitations include the maximum €1 stake amount per spin and the five second minimum duration per spin. Among the restrictions specific to virtual slot machine games, the prohibition of jackpots (i.e., stakes or winnings may not be accumulated for the purpose of creating winnings for future games) and of autoplay functionality are to be mentioned. Online poker is also restricted, including the prohibition of video poker, restrictions on the number of tables to be played at the same time (i.e., a maximum of four) and limitations on stakes and blinds.

If you’re looking to enter the German online gambling market with your own online casino, CrustLab can help you navigate the complexities of iGaming development. From obtaining licenses to building a robust online casino platform, our team of experts is here to support you every step of the way. As the market evolves, gambling operators must stay ahead of regulatory changes and adapt to new trends to remain competitive. As of now, the German gambling market is characterized by restrictive regulations, but that is expected to change gradually over time. Regular risk assessments and collaboration with AML compliance experts are crucial for maintaining a secure gaming environment. Promoting responsible gambling through these measures not only protects players but also safeguards the integrity of the online casino.

Going into the 21st century and the dawn of online gaming, Germany still had no clearly outlined framework for managing the industry. As a result, many offshore companies entered the market, creating a robust black market for interested players. Going by the latest figures published by the authority, there are currently between 800 and 900 websites offering illegal online gambling in Germany. These operators account for a market volume of €300m-€500m and make up around 2%-4% of the authorised market. Operators must implement comprehensive measures to ensure responsible gambling and player protection. This entails establishing protocols like self-exclusion mechanisms, deposit limits, and tools that encourage moderation.

Across Europe, countries are cracking down on wayward operators who don’t strictly adhere to the rules, withover $60 million in fines levied last year. As Germany begins to roll out its unified approach to gambling, operators can expect to be scrutinized intently from the start. At Schlun & Elseven Rechtsanwälte, our full-service approach means that our clients can receive ongoing legal support across legal fields from one source.

Responsible gambling tools, such as deposit limits and customer support, are vital indicators of a trustworthy platform. With online gambling now legal, operators have the chance to tap into a rapidly growing market. Germany’s large population of potential players makes it an attractive destination for both local and international gambling brands. Furthermore, the forthcoming practical case study will provide concrete evidence of the effectiveness of this approach, demonstrating to the GGL how the combination of foundation and insurance can offer a viable alternative to traditional cash deposits. This case study will offer valuable insights into the operational feasibility and regulatory acceptance of this innovative method, paving the way for broader adoption within the German online gambling industry.

Offering support through various channels, such as live chat, email, and phone, improves accessibility and caters to different player preferences. Providing exceptional customer support is crucial for enhancing player satisfaction and loyalty. Utilizing AI-driven chatbots can offer instant assistance, ensuring players receive help at any time. A well-maintained knowledge base allows players to find answers independently, improving their overall experience on the platform. This section will guide you through the essential steps, including market analysis, budgeting, software selection, and more. By leveraging data analytics and player insights, you can tailor your offerings to meet the evolving demands of the market.

Public authorities

The legal framework in the area of the protection of minors from harmful media content is regulated by the Youth Protection Act (JuSchG) and the Interstate Treaty on the Protection of Minors from Harmful Media (JMStV). The new German Interstate Treaty on Gambling (ISTG 2021) will come into force on July 1st 2021. This means that from that date private gambling operators can make an application to run online sportsbooks, poker rooms, and video slots.

Licensed online casinos in Germany have already seen significant revenue generation, amounting to approximately €6.4 billion in 2021. However, introduced regulations came with restrictions, such as a monthly deposit limit of €1,000 for players. There are also several new developments in gambling law in our neighboring country, which also sees a “tsunami” of recovery claims. Most of these claims are based on offering illegal (non-licensed) online gambling services. This has created a situation where operators with licences struggle to remain competitive in a market saturated with unlicensed competitors. Ironically enough, tax revenues from online gaming continually declined since legalisation.

A key transparency requirement to payments is payment verification, i.e. the operator is obliged to establish that the player is the actual owner of the payment method. The Implementation Guidelines suggest that a simple check on the side of the operator will not suffice but that the Payment Service Provider (“PSP”) has to be involved in payment verification. Both regulations have meanwhile been overtaken by technical innovations and a revision towards a modern, convergent and internationally compatible protection of minors is urgently needed. A draft bill to amend the JuSchG is currently on the table, but from the perspective of the games industry it urgently needs to be revised.

For historic or general reasons, some federal laws also influence gambling, such as the Race Betting and Lottery Act, the Trade Regulation Act, the Criminal Code and the Fiscal Code. Germany’s gambling reforms signal a transformative shift in the country’s approach to the industry. The Interstate Treaty aims to create a safer environment for players while also opening up new opportunities for operators. Remember, the key to a fun gambling experience is moderation and awareness of your limits.

Obtaining a License

Operators must also adhere to strict regulations and advertising guidelines and implement responsible gambling measures, such as self-exclusion tools and deposit limits, to protect players. Regular audits and compliance checks are conducted to ensure ongoing adherence to these regulations, fostering a safe and transparent gambling environment in Germany. Following this action, the German market became an impressive opportunity for both local and international operations. To start an online casino in Germany, you’ll need to understand the legal requirements, obtain gaming licenses, and ensure compliance with gaming regulations before undertaking your casino software development. Under the current licensing scheme, sports betting and online casino operators apply for a licence from the GGL, which allows them to operate legally within any state in Germany.

This represents a significant shift in a country where online gambling was heavily restricted before the treaty’s adoption. According to the German Anti-Money-Laundering (AML) Act, before a transaction is carried out, it has to be verified that the payment account is set up in the name of the player and must be with a bank, payment institution or electronic money institution licensed in the EU. The same requirements would apply for the use of cryptocurrencies, such as bitcoin; however, gambling regulators have not approved bitcoin as means of payment in a licensed environment yet. Although ultimately subject to a case-by-case analysis, where German jurisprudence may, but only to a limited extent, provide some guidance, social games will mostly be classified as skill games. Licensed operators must adhere to strict guidelines that ensure fair play and data protection.

Overall, the Interstate Treaty on the Media is an important step toward modernizing media regulation in Germany and adapting to the challenges and opportunities of the digital age. They are not intended to constitute legal or other professional advice, and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances. “This is something I’m looking forward to, because obviously, will be the first proper change of the interstate treaty since it was instated in 2021,” Hembury concluded. Priglinger-Simader said current guidelines will not be applicable from next year, and therefore an update is expected before 2026. Priglinger-Simader said current guidelines will not be applicable from next year and therefore an update is expected before 2026.

Operators must also demonstrate financial stability, including a minimum security deposit of at least €5 million, potentially increasing up to €50 million based on expected turnover, and pay annual supervisory fees based on gross gaming revenue. The licensing application process itself is costly, with fees that can reach up to €185,000, varying by license type. Registering a company is one of the vital steps of the application process since licenses are only issued to operators that are registered as recognized legal entities. First and foremost, operators must maintain an office within the European Union to facilitate regulatory compliance and communication with authorities.