German federal states decide on transitional regulations for online casinos

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German federal states decide on transitional regulations for online casinos
The German federal states have decided to adopt a transitional regulation for online casinos. Until the new State Treaty on Gaming, which is due to come into force on July 1, 2021, it will be possible to offer slot machines, poker and sports betting online in Germany. The transitional regulation is important for an orderly transformation towards regulated online gambling. Since the German federal states agreed on a new State Treaty on Gaming, which also takes online gaming into account, a transition phase has been discussed. The 16 federal states have now agreed to adopt a transitional arrangement that will allow casino operators and other gaming providers to continue doing business until July 1, 2021. This is an important factor. Online casinos have been around in Germany for many years, but there has never been any national regulation. The framework conditions are changing with the new regulation. The transitional regulation, which will come into force on October 15, 2020, stipulates that casino operators must adhere to all essential requirements of the future regulation.

Transitional regulation almost like future gambling regulation
Specifically, this means that the standard deposit limit will be 1,000 euros. Under certain conditions, however, it is possible for individual customers to increase the limit to 10,000 euros or even 30,000 euros. However, in order to increase the limit, customers must prove that they have the necessary financial resources. In addition, the higher limits may only be made available to players with a minimum age of 21 years. The gaming providers must also ensure that the high limits limit the maximum stake to 20 percent of the available capital. After all, the higher limits also enable high rollers to cope with the new gaming regulations in Germany. For casino operators, however, it should be a major challenge to correctly implement the limits technically and in terms of content within a few weeks.

This also applies to the betting limit in online casinos. In the future, no player may bet more than 1 euro per round. This limit is highly controversial among experts, especially since there is already a strict deposit limit. Why an additional bet limit should also be necessary in Germany is not necessarily clear. The fact is, however, that this stake limit will also apply to the transitional regulation. That is why the casino operators who would like to receive a license in Germany in the future are currently working at full speed to adjust the offer for the German market accordingly. For the many slot machine fans who have been used to being able to play with almost any high limit for years, this is a tough cut. Especially for the high rollers it will be difficult to develop enthusiasm for the new transitional regulation. A stake of 1 euro per round is simply not enough for many players. If a player has a very large amount at his disposal, perhaps also because he has made high profits beforehand, a small stake of 1 euro per round is not sufficient in many cases. The strict limits could mean that many gambling fans in Germany will soon be looking for providers without a German license. Already in the transition phase it will probably quickly become clear whether German gambling fans can be enthusiastic about the new regulation. During the transition phase, the casino operators who adhere to the transitional regulation will in any case have a direct disadvantage compared to the providers who do not take care of the new limits. However, when announcing the transitional regulation, the German federal states made it clear that only those providers who adhere to the transitional regulation have a chance of receiving a casino license for Germany in the near future.

Bookmakers also have to adhere to strict transitional regulations
A transitional regulation also applies to sports betting providers in Germany, which could still cause difficulties. The bookmakers who would like to have a German license soon will not only have to implement the limits that also apply to online casinos from October 15th. It is also necessary to significantly limit the live betting portfolio. In Germany it should only be possible in future to bet on the next goal scorer and the final result in live betting. This is a significant limitation compared to the live betting portfolios that are common today. Sports betting fans in Germany who would like to make full use of live betting in the future cannot use a provider who wants a German license. This is a big problem for all sports betting providers, who now have to adhere to the transitional regulation and thus make the offer significantly less attractive. At least in the transition phase, the bookmakers will also have the effect that there are various providers on the market who do not adhere to the restrictions and can therefore offer significantly more attractive live bets. The reduction of live bets to just two betting options is very controversial among sports betting experts. As in many other places in the new regulation, the scientific justification for the restriction is missing. Why the tip on the next goalscorer and the final result should be okay, but not all other live betting options, is also difficult to explain.

The new gaming regulation in Germany will be strict and the transitional regulation will give providers and customers a first foretaste of how the situation will soon be in Germany. Many sports betting and gambling fans will have an unpleasant awakening when the new rules are implemented in the major online casinos and with the top bookmakers. A little noticed marginal detail: In the transition phase, online casinos are not allowed to offer table games such as roulette, blackjack, poker or baccarat in Germany. This also means that most live dealer games in Germany will no longer be available, at least from providers who want a German license. There are many small and large details in the new gambling regulation that will cause outrage among many gambling fans. But maybe the casino fans will simply orientate themselves differently and use the providers who no longer care about the German regulation. This is exactly the effect that many sports betting and gambling experts fear. If the regulated offer does not become attractive enough, there will be many providers outside the regulated market who will happily collect the German customers who cannot find the offers they want on the regulated market. The federal states have announced that they will take action against these providers, for example by blocking certain payment methods. But whether this will really work in practice is rather doubtful. So far, no country in the European Union has managed to effectively lock out casinos and bookmakers that are outside of the regulation.

Player protection must also be guaranteed in the transition phase
The federal states also use player protection to argue with the transitional regulation. The only question is whether the transitional regulation will really improve player protection in practice. The big providers, who have been working seriously and correctly for many years, don’t have to change anything in their basic business model. What changes for these providers is the portfolio. In the future, some games and sports betting will no longer be permitted in Germany. The restriction of the offer and the limits mentioned are intended to ensure that player protection is improved. However, this assumes that there are no other offers beyond regulation. Otherwise, gambling and sports betting fans in Germany would have to voluntarily concentrate exclusively on providers who will soon have a license or who will adhere to the transitional regulation from mid-October. Each reader should assess for themselves how likely it is that this will happen. There are many inconsistencies in the new gambling regulation that will likely come to light during the transition period. It can be assumed that most casino fans in Germany do not yet know what to expect. Many sports betting fans are likely to be in a slight state of shock from October 15, when suddenly the beloved live bets are no longer available to the usual extent. An exciting detail on the side: During the transition phase, gaming and sports betting fans in Schleswig-Holstein will benefit from the fact that this state will have a significantly more liberal transition regulation.

Many experts expect that there will be various court proceedings in the next few years in which the new German gaming regulation will be finally determined. It may well be that one or the other regulation that is provided in Germany cannot be reconciled with national law or with EU law. For example, it is still unclear whether there will be a cross-provider deposit limit. That was originally planned, but now there are also indications that there might only be one deposit limit for each provider individually. In any case, it will be exciting to see how Germany will implement the new gambling regulation. The new German gaming authority, which is to be set up in record time, will soon have to ensure that not only the licenses are issued correctly. The regulation and supervision of gaming providers will also fall within the remit of the German gaming authority. There are many experts who are very skeptical about the practical implementation of the new gambling regulation. Regardless of the various rules that will apply in the future, it could also be very difficult in practice to get the gambling regulation done on time. The experience of other countries in recent years is that it is not easy to license and regulate gambling providers. But in Germany everything is different and better and more efficient. Anyone who still does not know this after the last few months of crisis management is probably just an ignoramus. For uninvolved observers, at least the entertainment value should be very high in the next few months. For the many gambling and sports betting fans in Germany, however, it could be as uncomfortable as it is for the providers of sports betting, poker and casino games.


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