EGBA takes swing at German iGaming regulations

European Gaming and Betting Association (EGBA) says Germany’s planned iGaming regulations will fail to attract players to the regulated market.

Germany.- The European Gaming and Betting Association (EGBA) has criticised Germany’s proposed iGaming regulations saying they will fail to attract players to the regulated market instead of unlicensed sites. 

EGBA Secretary-General, Maarten Haijer, said the proposed gambling regulations submitted to the European Commission are too tight to be able to win back players from the unregulated market after a late start from Germany.

They include a deposit limit of €1,000, a stake limit of €1 per spin on slots, no live betting and a ban on advertising online gambling between 6 am and 9 pm.

Haijer said: “The starting position of Germany is so bad that, in 2017, the Düsseldorf Institute for Competition Economics (DICE) predicted that the country had a channelling rate of only 1.8% – meaning 1.8% of online gambling activity in Germany took place on websites which are licensed in Germany – compared to 95 per cent in the UK and 90 per cent in Denmark.

“The new policy can only be effective if it ensures that gambling websites licensed in Germany are more attractive than those outside it – so customers will play on these websites rather than unlicensed ones. This requires the new policy to meet the customer’s needs by ensuring there is sufficient choice in the market – including brands, products and bet offerings.

“The policy measures currently on the table are highly questionable. They are overly prescriptive and introduce restrictions that are not evidence-led.

“The combined effects of the proposed restrictions on player accounts (deposit and time restrictions), on products (e.g. the ban on online casino is not fully lifted) and on bet types (e.g. live betting will be banned), jeopardises the task of achieving a high channelling rate and sets the scene for continued political and legal challenges.”

Germany has submitted its iGaming regulations to the European Commission ahead of the opening of its regulated online gambling market from July 1, 2021, under the Fourth State Treaty on Gambling. They are now subject to a standstill period until August 19.

Online betting and casinos are currently only permitted in the state of Schleswig-Holstein. In the meantime, different states have taken different approaches to how to treat currently unregulated operators.

The new regulations will do little to unite the country’s fractured approach to gaming, with each of Germany’s 16 federal states able to create their own regulations for online casino games.

Haijer said: “The biggest threat to the success of the new policy remains the piecemeal approach towards the regulation of online casino. The decision to leave this to the states will not only create mini-casino markets, with varying degrees of channelling, but it will also lead to gambling regulations that are inconsistent.

He said history showed a successful regulatory framework needed three ingredients: it needed to offer a favourable option for players to choose regulated over unlicensed offerings, a proper regulatory framework with “clear, transparent and predictable” procedures to ensure operators would want to gain a licence, and the ability for regulated companies to be profitable.

He added: “Gambling is human behaviour and players will shop around for their favourite brands, products, or the most competitive betting odds or bonuses. Even more so in an online environment, where choice is freely available regardless of whether the website is part of a regulated market or not.

“If the tax and regulatory burdens are too high, companies will not enter or stay in the market, particularly when there are already other restrictions in place which will reduce their revenues. More companies in the market mean more choice for the consumer and more tax revenues for the state.”

According to consulting and research provider Goldmedia, German gambling revenue could reach €3.3billion by 2024. It found that 62 per cent of German players are expected to choose a German-licensed online casino when the regulated market opens.