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Gambling Regulation in Germany: A significant Blow for All Local Operators?

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Gambling Regulation in Germany: A significant Blow for All Local Operators?
Reading Time: 4 minutes

 

Is the German gambling market facing an uncertain future? Over the past few years, tremendous delays and changes have cast doubts over the German betting market. In 2012, 16 German federal states passed a treaty on betting, intending to launch sports betting in the online casino world.
Read on and learn about the uncertainties facing the German sports betting market.


The Future of Online Slot Providers

This year, the federal states passed a new gambling treaty, with the primary aim of licensing and certifying a regulated market rather than having a large black market. The same case applies to poker games and online slots which includes most games from developers like NetEnt, Microgaming or Big Time Gaming with their ground-breaking slot engines like Megaways or Megaquads. Thanks to the new gambling treaty, the prohibition of online casinos was lifted in July 2021.

In addition, the treaty will allow the registration and licensing of online casino providers and sports betting providers. Despite the newly proposed betting model, the state lottery monopoly is set to remain operational.


Has the Federal States Treaty Put an End to Online Gambling Uncertainties?

If for a minute you thought the treaty would put an end to the doubts and uncertainties facing the German gambling market, you’re mistaken. Earlier in April, the Darmstadt Administrative Court ceased the awarding of licenses to local operators. A few weeks later, the ruling was challenged by Vierklee, a renowned sportsbook operator.

According to the Hessian Court, over 30 local operators had applied for the gambling license. Also, an addition of 20 casino operators had severe intent to apply. More than 99% of online sports betting activities in Germany would have moved to the legal gambling market if the applications went through.


The Take of DSWV on Betting Uncertainties

Since then, multiple betting operators have been left in dismay, describing the ruling as a big blow to the German gambling industry. DSWV, an association that advocates a competitive and modern regulation of sports gambling in Germany, has slated the betting regulations and policies in the country as non-competitive, also see this article.

The association claims that premier championships like Bundesliga miss out on advertising income and sponsorship deals. This is because the country features non-competitive sports betting policies and regulations. In addition, the German sports leagues have been lagging compared to other European sports leagues, such as the English Premier League.

According to Luka Andric, the DSWV managing director, the current delays in licensing and regulating the online betting market is inconveniencing. Luka Andric adds that the delays would cause the country a great deal in terms of securing sponsorship deals for clubs.
The common conflicts between states governed by Conservatives and those managed by the Social Democrats have been resolved. This implies there is an agreement to enact the 2021 Interstate Treaty in real-time.


Effects of Halting the Betting Licenses

Halting the process of awarding licenses to local operators is not only frustrating but also discouraging. Multiple betting operators had invested efforts and time preparing the license application forms, only to find out the process had come to a halt.
Sports betting makes a significant economic stand, considering Germany has a large population size.

So, how can the German sports betting industry thrive? DSWV states that it’s essential to regulate the sports betting market. Whether the industry will thrive entirely depends on the authority’s commitment to block local operators without licenses from providing their betting products to German consumers.

Therefore, the federal states need to make several regulatory amendments to the existing gambling policies. As a result, German betting enthusiasts will be channelled towards licensed and governed operators.


Sports Betting Measures and Restrictions

Over the years, the black market has been an area of concern to several gambling jurisdictions. Recently, renowned authorities such as KSA (Netherland’s gambling regulator) and SGA (the Swedish Gambling Authority) have pushed strict regulatory proposals to govern online sports betting activities.

The German regulatory authorities have also put forward strict regulations and measures. These restrictions include a minimum stake limit of €1on all virtual machines. Other measures include a live streaming ban on sports betting websites, limited in-play markets, up to five-minute delays when switching to another betting website, and commercial advertising for online poker, virtual slots, and casino games.


German Sports Betting Operators Take on Proposed Restrictions

The proposed restrictions have provoked critical responses. Local operators have claimed the measures fails to focus on bettor’s protection, hence considered less competitive and less attractive. In addition, the local operators have termed the measures as unfulfilling and will create a less competitive experience for bettors.

According to Lycka, the director of regulatory affairs states that the measures imposed by the states will be less attractive than the unlicensed market. As a result, the move can encourage gamblers to wager on black market websites. However, it has been revealed that the regulations will be amended to favour local operators and gamblers in real-time. The regulators are set to engage politicians to come up with sensible and necessary amendments.


Why It’s Important for Sports Betting to Operate in a Regulated Market

It’s essential for sports betting to operate in a regulated gambling market. In Germany, sports betting has become more popular, thanks to the media and featured advertising channels. Over the decade, the German betting market has grown tremendously. The trend is expected to continue once the sports tournaments resume.


Final Thoughts


The bottom line is; the proposed measures are not encouraging channelization. As it stands, local operators claim the measures put forward by the regulatory authorities encourage black market play. Betting enthusiasts and operators have been longing for gambling regulation in Germany. Soon, sports betting websites will become legal. However, this does not mean the existing uncertainties will be done away with. All in all, the local gambling operators are hoping for a more certain future.

Compliance Updates

Montenegro’s evolving legal landscape: recent amendments and controversies in games of chance regulation

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Reading Time: 3 minutes

 

Montenegro’s Law on Games of Chance (the “Law”) was enacted in 2004 and has undergone multiple amendments since. The most recent ones came into effect on 1 January 2024.

The aim of the amendments, as stated by the competent authorities, is to ensure a sustainable regulatory system for organising games of chance via the internet or other telecommunication means, as well as to generate additional revenue from these activities. This objective is to be achieved through measures aimed at establishing a variable concession fee for the organisation of online games of chance, a provision not envisaged in the prior legal framework in this area. Another measure to achieve the set goal is to introduce a ban on participation in foreign games of chance via the internet and other telecommunication means for which bets are paid on the territory of Montenegro.

To achieve these objectives through the proposed measures, several amendments to the Law have been proposed and adopted:

  • The concept of organising games of chance through the internet or other telecommunication means has been clearly defined for the first time.
  • A ban has been introduced on participation in foreign games of chance for which bets are paid within the territory of Montenegro, regarding the organisation of internet betting. Therefore, the competent authorities are now obliged to restrict access to the websites of gaming organisers who accept payments for games of chance from players in Montenegro, through the blocking of IP addresses by an independent regulatory body in the field of electronic communications, as well as the prohibition of all types of payments to foreign organisers. Furthermore, the competent authority is required to maintain and publish a list of unauthorised online gaming organisers ex officio.
  • A higher annual fixed fee per casino has been introduced, now amounting to EUR 100,000 instead of the previous EUR 50,000. Additionally, the variable fee for organising games of chance in casinos has increased from 10 % to 15 % of the base.
  • A prohibition on organising games in residential-commercial buildings has been introduced.
  • A new regulatory framework has been established for the organisation of games of chance on the internet. The most significant changes involve defining the conditions and methods of player registration and identification, as well as establishing the obligation to pay the variable portion of the concession fee for organising betting games of chance over the internet, as well as for organising games of chance in virtual casinos and online slot games. The fee is calculated at a rate of 10 % of the base, which consists of the total amount of stakes reduced by the value of payouts and is paid by the fifteenth of the month for the previous month. The fixed part of the concession fee amounts to EUR 10,000 for all the aforementioned types of games of chance organised over the internet. Additionally, with the introduction of the new Article 68f of the Law, it is stipulated that payments for organising games of chance over the internet can only be made through payment cards or at the premises where games of chance are organised in accordance with the Law.

The new legislative solution has not escaped scrutiny from interested market participants, especially regarding the controversial Article 68f. There has been particular attention in the public sphere to the reactions of associations of gaming organisers, which, through various reviews, have questioned the justification, sustainability and legality of the provision stipulating that payments for organising games of chance over the internet can only be made through payment cards or at the premises where games of chance are organised.

In response to the reaction of the association of gaming organisers, a petition was initiated, gathering over 25,000 signatures. An initiative was subsequently submitted to the Montenegrin Parliament to repeal Article 68f. In addition, another initiative was lodged with the Constitutional Court of Montenegro to review the constitutionality of Article 68f.

The competent authorities are currently processing these initiatives. Meanwhile, legal experts and the general public eagerly await more answers to these legally and practically intriguing questions in the coming period.

Source: schoenherr.eu

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Balkans

Bulgarian National Revenue Agency, the State Agency for National Security and the Gambling Operators Join Forces Against Money Laundering and Terrorist Financing

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Bulgarian National Revenue Agency, the State Agency for National Security and the Gambling Operators Join Forces Against Money Laundering and Terrorist Financing
Reading Time: < 1 minute

 

The Bulgarian National Revenue Agency, the Specialised Administrative Directorate “Financial Intelligence” of the State Agency for National Security and branch organisations of the organisers of gambling operators will join efforts against money laundering and the financing of terrorism. This became clear during a working meeting, which took place on March 20 at the invitation of the Director General of the National Revenue Agency Rumen Spetsov, and his deputy Georgy Dimov.

The participants discussed the possibilities for the branch organisations of gambling operators to monitor the implementation of measures against money laundering and the financing of terrorism by their members. The talks also discussed changes in normative and sub-normative acts regulating the activity in the sector, which would lead to better accountability and guaranteed protection of the public interest.

During the meeting, it was decided that representatives of the National Revenue Agency would discuss with the branch gambling organisations issues related to the implementation of normative and sub-normative acts, providing guidelines for the correct fulfilment of obligations by gambling operators.

“The National Revenue Agency is partner-oriented and is available to assist businesses in fulfilling their obligations by the current legislation. We highly value the commitment of industry gambling organizations in the prevention and effective fight against money laundering and terrorist financing,” said Rumen Spetsov – Director General of the National Revenue Agency.

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Australia

Crown Approved to Retain its Melbourne Licence

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Crown Approved to Retain its Melbourne Licence
Reading Time: 3 minutes

 

The Victorian Gambling and Casino Control Commission (VGCCC) has ruled Australian casino giant Crown Resorts can keep its Crown Melbourne casino licence.

The full Commission decided that Crown Melbourne has addressed the failings identified by the 2021 Royal Commission into the Casino Operator and Licence.

Commission Chair Fran Thorn said that the Royal Commission detailed how Crown Melbourne had breached its legal, social and moral obligations, resulting in illegal activities, tax avoidance, money laundering, criminal associations and significant harm to vulnerable community members, ultimately finding Crown Melbourne unsuitable to hold the Melbourne Casino Licence.

“Despite the enormity of its findings, the Finkelstein Royal Commission recommended Crown be permitted to continue operating under stringent independent oversight conditions for two years, determining it had the will and capacity to transform itself to again become suitable, which would be to Victoria’s benefit,” she said.

The Victorian Government responded decisively to the Royal Commission’s findings, appointing a Special Manager to oversee Crown Melbourne’s operations and remediation. It also established the VGCCC as a new regulator focussed solely on the gambling industry and created a specific set of enhanced powers with respect to the Melbourne casino.

The Commission was given the responsibility of deciding whether it was clearly satisfied that Crown Melbourne had returned to suitability and whether the Melbourne Casino Licence remained in the public interest. In making its independent determination, the Commission carefully considered the reports of the Royal Commission and other relevant inquiries, the reports of the Special Manager. Those reports considered the steps Crown Melbourne had taken to address the matters identified by the Royal Commission and the measures to ensure they would not be repeated.

Commissioner Thorn said the Special Manager’s final report concluded that Crown Melbourne has remediated the failings exposed in the Royal Commission and established the critical foundations needed to achieve sustainable overall transformation in coming years.

“There was no evidence of maladministration or illegal or improper conduct indicative of the serious and systemic failures previously identified by the Royal Commission, and these failings had been addressed,” she said.

Commissioner Thorn said that Crown Melbourne had demonstrated to the satisfaction of both the Commission and the Special Manager that it had introduced extensive reforms to prevent or reduce gambling harm, financial crime and money laundering. It has also addressed systemic risk management failures and strengthened its integrity framework.

“During our investigations, we observed a different Crown Melbourne emerging with a clear understanding of the privilege and obligations of holding the Melbourne Casino Licence,” she said.

The Commission’s decision was also supported by Crown Melbourne’s comprehensive transformation plan, required by the Special Manager, against which it will continue to be held accountable going forward.

“That transformation plan will be at the heart of our oversight, along with Crown’s legal and social obligations, and provides the next level standard for Crown Melbourne. The Commission will require Crown Melbourne to deliver further transformation through a statutory direction that will be issued shortly,” she said.

Along with the VGCCC’s strengthened oversight regime and enforcement powers, the VGCCC has established a new, specialist Casino Division providing confidence that Crown Melbourne will be held stringently accountable in the future, including for its ongoing transformation.

Commissioner Thorn said: “In return for the privilege of an exclusive licence, Victorians have a right to expect that Crown Melbourne will never again prioritise profit ahead of the safety and wellbeing of its patrons and staff or over compliance with its legal and social obligations.

“Crown Melbourne must continue to seek to rebuild and earn public trust by demonstrating the good character, honesty and integrity that are necessary to remain a suitable casino operator. We put Crown on notice that this Commission will not hesitate to act if the privilege of holding the casino licence is again abused.”

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