Germany’s New Regulated Market for Online Casino, Poker Launches

Germany’s Interstate Treaty on Gambling (ISTG 21) came into force Thursday, ushering in a new era of legally regulated online casino and poker gaming.

Previously, Germany had been a gray market for operators, albeit a large and extremely lucrative one.

While it was illegal for companies based in Germany to offer online gambling, those located outside of the country were able to do so with impunity. There was no law restricting German citizens from accessing and using ‘offshore’ sites.

Meanwhile, the protectionist state-owned gambling monopoly offered limited sports betting. Way back in 2010, the monopoly was found to be incompatible with EU law, which required the country’s 16 federal states, or Länder, to come up with a workable, unified set of new laws.

Scramble to Comply

Somewhat unexpectedly, they found consensus early last year. In September, a transitional “toleration period” was formally announced, during which operators could offer gaming to the German market without a license. That’s if they adopted the new regulatory measures.

Operators had one month to become compliant with a set of rules that included strict consumer protections, or face being cold-shouldered by the new regime.

While many have praised these player protections, others have suggested that they will provide an “incomplete” gambling experience, which could drive consumers to what is now a black market.

Tax Worries

Also controversial is the decision to impose a 5.3 percent tax on player stakes for online casino and poker games, which has been called excessive. It also represents a huge headache for operators of online poker cash games, who must pay 5.3 percent of each player’s stack to the government every time they sit down at a table.

This has led many major operators, including PokerStars, Party Poker, and Unibet, to cut back on the games they offer to avoid liabilities. One, Betsson, has decided to quit the market entirely.

The regulations have also established a new gaming regulator, the Glücksspielneuregulierungstaatsverag (GlüNeuRStV), which is comfortably the world’s longest-named gambling regulator. It beats the previous title holder, Holland’s Kansspelautoriteit, by an extraordinary 18 letters.

The GlüNeuRStV, which even has a long abbreviation, will shortly begin handing out the first German online gaming licenses.