Germany’s Gaming Regulator Wins Against Operators to Restrict Affiliates, Advertising

Posted on: June 27, 2023, 03:26h. 

Last updated on: December 15, 2023, 10:52h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

When Germany’s new unified gaming regulator began approving gaming licenses for online slots, and  later poker, some operators cried foul. Not because they couldn’t offer their services but because they felt the Joint Gaming Authority of the Federal States (GGL, for its German acronym) didn’t have the authority to control how they advertised. The courts don’t see it that way, and the operators are going to have to play by the rules if they want to keep their licenses.

The Cologne Cathedral in Cologne, Germany, at dusk
The Cologne Cathedral in Cologne, Germany, at dusk. The country’s unified gaming regulator, the GGL, won a court battle to restrict gaming advertising and affiliate deals. (Image: Pinterest)

As the GGL began greenlighting operators, it included ancillary provisions that cover advertising and affiliate restrictions. All operators were expected to adhere to the guidelines as soon as they became available.

A number of gaming operators weren’t happy with the resolution and sought relief in an administrative court. They won the first round when that court agreed, but lost round two this month.

Our Way or the Highway

The Higher Administrative Court of Saxony-Anhalt, the state where the GGL has its headquarters, overturned the decision of the lower administrative court. Not only does the regulator have the authority to introduce restrictions, but it can do so at will.

In particular, the court agreed that the GGL’s ban on infomercials and advertising for free online casino games and virtual slot machines is justified. In addition, it upheld the prohibition on influencer marketing and affiliate advertising with partners who promote illegal gambling.

This supports a previous ruling by the same court. This past May, it agreed with the GGL’s stance that it could penalize gaming operators who worked with affiliates that promote illegal (nonlicensed) gaming platforms.

The court’s ruling stated that the regulations are necessary in order to fulfill the requirements of the Fourth State Treaty on Gambling. The latest version of Germany’s gambling laws, which helped bring about a unified approach to regulations, requires more attention to gambling harm. The GGL’s new controls are intrinsic to meeting that goal.

However, it hasn’t been all bad news for operators. The court decided that a complete ban on advertising in public spaces, including on billboards and public transportation, probably goes too far.

Operators are going to have to live with the decision whether they like it or not. Germany’s policymakers have repeatedly shown to be steadfast when implementing changes, and the Higher Administrative Court signed off on its ruling by stating, “The decisions are final.”

Seal of Approval Coming

In the fight against illegal online gambling, the definition of which is currently being contested by officials in Malta, Germany thinks it has a solution. An official “test and permit seal” for permitted platforms is coming to the online gaming space.

The GGL wants to establish a corresponding labeling system in the coming weeks, according to German media outlet Spiegel, citing official circles. Starting July 1, providers will have to prove that they have a state license and that they are complying with the provisions of the State Treaty on Gambling on player protection.

At the same time, consumers should be able to recognize legal offers more easily in the future. Whereas some iGaming platforms may list their license details in some obscure part of the website, Germany wants the information to be instantly viewable on the platform. In addition, with the GGL recently banning daily fantasy sports, consumers need to know.

Gambling in Germany is only permitted under state supervision and control, and each state has taken a different approach. Some states have opened their markets, while others have created state-led monopolies.