European Commission Criticises Third German State Treaty on Gambling

The European Commission has criticised the latest incarnation of Germany’s State Treaty on Gambling.

After the proposed legislation was submitted to the Commission in May, general director Lowri Evans has submitted a response which casts doubt on the effectiveness of the planned framework.

Evans criticised the short-term nature of the third amended State Treaty on Gambling. Evans questioned the logic of implementing the Treaty for such a short period from 1 January 2020 to 30 June 2021.

In order to secure a licence, operators will be required to shut down any online casino offerings and offer sports betting without in-play wagering. Players will be restricted to spending €1000 per month, with a 5% turnover tax levied on licensees. These restrictions and fees are expected to slash operators’ revenue should they be fully enforced.

Evans noted that the controls to be implemented could make the market particularly unattractive for operators. With the processing of licence applications to begin from 2 January, the first working day of 2020, licences could be valid for less than 18 months.

Evans casts doubt on whether goals of the Treaty, such as increasing player protection and driving unlicensed operators from the market, could be achieved in an 18-month period. Evans also queried when the effectiveness of the Treaty would be assessed, something pledged when it was first introduced in 2012.

“The Commission emphasises the need for a continuous evaluation of the implementation and application of the State Treaty, in particular (but not limited to) sports betting. The German authorities have already committed in 2012 […] to an evaluation of the appropriateness and effectiveness of the provisions relating to sports betting. Unfortunately, in view of the previous non-award of sports betting licenses, no such evaluation has yet been carried out. Therefore, the German authorities are invited to [explain] how and when an evaluation of the appropriateness and effectiveness of the sports betting provisions will take place,” Evans stated.