Germany’s new gambling legislation allowing the regulation of online gaming has been approved by the last state parliament.
Germany.- The country’s Fourth Interstate Treaty on Gambling has finally reached the end of its long path into law.
Saxony-Anhalt this week became the last state parliament to ratify the treaty, which will now officially come into force on July 1.
The treaty already had the necessary approval of 13 states, but approval from Saxony-Anhalt was essential to the legislation since the state is to host the regulatory agency that will supervise gambling law and operators’ conduct under the new regime.
It’s been almost a decade since Germany’s Bundesrat first agreed to the establishment of a federal regime for online gambling, but the process of passing legislation was held up by disagreements between Germany’s states over rules, licensing requirements, taxation and protections for state-level monopolies.
Germany’s sports betting trade association, DSWV, welcomed the final ratification.
DSWV President Mathias Dahms said: “This is the beginning of a new age of gaming regulation in Germany. After sports betting, the federal states are now rightly regulating further online games of chance in order to finally control what is happening on the market.
“Consumers benefit from clarity and security: providers with a state seal of approval meet the highest standards of consumer and youth protection, gambling addiction and fraud prevention.”
What does Germany’s new gambling legislation mean?
The Fourth Interstate Treaty imposes a restrictive regime on licensed operators. Slot games are limited to €1 per spin and a five-second average spin speed.
Table games are dealt with separately in order to grant state lotteries a monopoly for the product at each individual state’s discretion. There’s also a prohibition on in-game betting in sports. The rate of taxation for slots and poker is 5.3 per cent of revenue.
German states will be obligated to follow the new treaty until 31 December, 2028, after which they will have the option to withdraw provided they give a year’s notice.
Germany has already introduced a transition regime for igaming operators, under which operators already active in the market were allowed to officially offer their services provided they meet the requirements of the new legislation.
Criticism of the legislation from igaming and sports betting operators in Germany
The DSWV maintains that reforms need to be made to the Interstate Treaty because the high tax rate on online poker and slot machines coupled with in-play betting restrictions on sports made the regulated market untenable for many operators.
Dahms said: “Because in the end only the black market profits from this, no other country in Europe taxes the stakes in virtual slot machine games, but always the gross gaming revenue – the actual revenue of the gaming provider
“In this way, Germany becomes a wrong-way driver in tax policy. We therefore appeal to the members of the Bundestag not to hastily wave through the draft of the racing betting and lottery law, but to deal with the issue in greater depth in the coming electoral term.
“Adjustments will have to be made here soon. We place our hopes in the new authority, which will shape and objectify the gambling policy debate in the future.”
In an interview with Focus Gaming News, Maarten Haijer, Secretary General at the European Gaming and Betting Association, raised doubts about how many operators would be interested in entering Germany’s licensed gaming market under the current conditions.