Hesse to launch its own regulation for sports betting

Hesse is using a legal mechanism to offer operators a temporary period of “tolerance.”

The collapse of Glücksspielstaatsvertrages or the German State Treaty on Gambling has resulted in the state of Hesse launching its own regulatory system for sports betting.

Germany.- The German state of Hesse is launching its own regulatory framework for sports betting after the collapse of the German State Treaty on Gambling, Glücksspielstaatsvertrages.

With the aim of a legal mechanism Hesse will offer operators a temporary period of “tolerance,” in effect guaranteeing that the state government will not prosecute operators under the provisions of the Interstate Treaty. Thanks to this legal workaround Hesse will have the chance to collect gaming taxes from sports betting.

As per Hesse’s announcement, the new permits only apply to sports betting and retain the provisions of the Interstate Treaty as their basis. Applications will be open from September 15 to November 15. The issuance of a permit does not imply that a license will be issued under any future legislation Applicants must deposit a security in the amount of €367,900 in the form of an unlimited absolute bank guarantee from a credit institution based in the EU. The operators approved for the original 20 licenses need to submit less evidence of suitability. In addition, other documentation regarding tax and good corporate governance must be supplied.

Furthermore, over and above the provisions of the State Treaty there are additional provisions regarding staffing, age verification, problem gambling and drug taking. The permit will be valid only for sports betting in the state of Hesse and there is no limit to the number of permits that may be issued. EU Court of Justice rulings have made the German gambling laws illegal.

It is highly likely that the new Hesse permits will then be the only form of licensing available for online sports betting in Germany, one of the largest sports betting markets in the world. As the permits won’t be valid for operations in the other 15 German states, operators will have to decide whether they are worth the cost.