German state threatens sports betting operators

German state threatens sports betting operators

The German state could put in jeopardy the sports betting segment.

The German state of Hesse will award sports betting licences soon, but its restrictive model could chop 70% off operators’ revenue.

Germany.- The sports betting segment is a highly-lucrative vertical and many governments seek to regulate it. However, the German state of Hesse may hit sports betting operators with a not-so-appealing model.

The local government will soon award the first licences, but experts have warned about its restrictive model. Up to 70% of operators’ revenue could disappear, analysts say.

The Regional Council held a meeting with more than 200 company representatives. They heard the government’s plans for the licensing process, which will launch soon.

After giving different details of the application process, they explained that applicants will have to stop all non-sports betting activity in the market once they get a licence. Furthermore, in-play wagering will be banned, customer spend limited to a monthly €1k and a 5% turnover tax imposed on operators.

As quoted by iGaming Business, Regulus Partners said there could be major structural problems for operators. They stated that Germany would be “very unlikely as a profit centre for anyone.”

Other requirements

The Regional Council of Darmstadt, which represents Hesse, has issued a comprehensive list of demands for acquiring the licences to operate sports betting. Among these rules, potential operators must prove the existence of a German business or the presentation of a gambling licence from another German state as a prerequisite.

The applicants must assure that they do not conduct any illegal operations in the country, such as tax debts, and must present an official certificate of good conduct. “The Authority excludes in its letter a combination of sports betting with other games of chance offering. According to § 21 of the GlüStV, the operator may not perform any casino games during the term of the licence.”

The agency also requires evidence of the security of the IT network used to process the betting and all customer transfers, as well as a plan to educate customers about search risk and the potential threat of gambling.

Hesse Interior Minister Peter Beuth said: “It is an intolerable condition that sports betting is still possible in Germany without the providers taking action to combat gambling addiction or consumer and youth protection. We want to end illegal gambling and re-regulate the industry in Germany.”

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