Updates in iGaming and Gambling Legislation in Germany

Is there a gloomy forecast for Germany’s gambling industry? Due to significant delays and shifts, the German betting industry has been clouded by uncertainty in recent years. Sixteen German federal governments signed a gambling treaty in 2012 intending to introduce sports betting to the online casino industry.

Learn about the difficulties facing Germany’s sports betting industry here.

Finally, the long-awaited (partial) reform of German gaming law has taken effect. The new German Interstate Treaty on Gambling (ISTG 2021) became effective in July that year, making the German market available to private operators. 

Despite issues with the licensing process private operators must go through, several companies have applied for and been granted licenses. Courts have been kept busy over the past year by players seeking to recover winnings from private operators. Different judicial judgments, their justifications, and new developments are described here.

Recent Organizational Shifts in Key German Gambling Authorities

Each of Germany’s 16 federal states has some say over gambling regulation, which means 16 different federal agencies could rule on the matter. But two bodies were already appointed by the federal states to handle licensing procedures. 

The Darmstadt Regional Council (RP Darmstadt) in the state of Hesse is in charge of issuing licenses for online sports betting in Germany. Saale in Saxony-Anhalt is regulated by the State Administrative Office in Halle, which gives gambling licenses for games, including online slots and poker. By the end of the year 2022, both of these organizations will be rendered ineffective.

All German online gambling licenses and enforcement mechanisms, such as prohibition orders, IP blocking, and barring payment service providers, will be transferred to the newly established Joint Gambling Supervisory Authority in Halle on January 1, 2023. 

Since July 1, 2022, the GGL has been actively pursuing legal action against illegal gaming offers and promotions. The GGL principally employs the above-mentioned procedures, IP blocking and blockage of payment service providers, to implement prohibition orders. 

In addition, the GGL can begin criminal investigations in concert with the district attorney’s office. To guarantee that gambling businesses can function on a level playing field, the GGL should ensure that the law is consistently applied and enforced.

Methods of Obtaining a License

Private operators can apply for sports betting, virtual slot machines (online simulation of the terrestrial slot machine), and online poker licenses under the Internet Gambling Regulation and Tax Act of 2021 (ISTG 2021). Each permit is good for five years after it is issued.

Playing Casino Games Online

Online gambling is excluded from the rulemaking. This category includes online broadcasts of real-life casinos that allow viewers to join in the action and computer-generated simulations of popular casino games like blackjack and roulette. 

Federal states have different rules regarding the possibility of acquiring a license for online casino games. The individual federal states have the option of either allowing exclusively state-based operators to offer online casino games or of granting permits to private operators as well. 

There will be a restricted number of licenses available to private operators if the federal states elect to issue them, in contrast to the permits for i.a. virtual slot machines and sports betting. 

Many federal states still need to make up their minds on whether or not private operators should be able to apply for an online casino games license, as the experts from https://casinoreviewers.com need to rank casinos in Germany as well. It has already been announced that the federal governments of Schleswig-Holstein and North Rhine-Westphalia intend to offer licenses to private operators.

Schleswig-Holstein and five by North Rhine-Westphalia will issue four permits. License applications for online gambling are currently being prepared. Lawmakers will probably base the regulations on what is required to run a traditional casino.

eSports, Poker, and Slots

Online sports betting, virtual slot machines, and poker have remarkably similar licensing procedures with minor differences. The most crucial elements of the general norms are summarized here.

By the end of 2022, all valid online sports betting licenses issued during the ISTG era will have expired. Applying for new licenses to offer online sports betting under ISTG 2021 for 2023 and later is presently underway, with the first licenses likely to be issued in the fourth quarter of 2022.

To operate online slot machines, the first licenses have already been awarded. In the upcoming months, we anticipate a steady influx of new licenses.

Following ISTG 2021, the authorities maintain an online official list of all licensed and authorized operators and brokers of games of chance (so-called safelist).

The Recovery Claims

Not a new occurrence, recovery claims have seen an increase in activity over the past year as more and more participants attempt to recoup their investments from private operators. 

No final and binding high court ruling has been rendered even though these claims have occupied courts for several years: Some courts have ruled in favor of players and awarded them compensation (such as the LG Köln and the AG Essen), while others have ruled against them and denied their claims (such as the LG München I and the AG Euskirchen, LG Regensburg, and LG Dresden – most of which have not yet been published). It appears that sports betting is beginning to revive. In this case, business owners have a fair possibility of successfully challenging reimbursement claims in court.

The fact that players lost their money at unlicensed German online casinos is at the heart of recovery claims. Casino patrons claim that the casinos have illegally taken their bets back, while casinos counter the fact that the patrons knowingly engaged in unauthorized gambling.

Gamblers commonly take legal action against the financial institutions that process their deposits and withdrawals at online casinos.

Even though the judgments mentioned above were handed down in a pre-ISTG 2021 legal atmosphere, comparable cases are still possible because internet casino operators in Germany still provide services to the German market without the necessary license.

Conclusion

To sum up, the recommended actions do not promote channelization. The current state of affairs is that local operators complain that the measures proposed by regulatory authorities encourage black market activity.

Germany’s betting community and business owners have long awaited legalization. The time is coming when online sportsbooks will be entirely legit. However, the current doubts will remain. The local gambling industry is looking forward to a more stable future.