German States Agree Online Casino Transitional Period

German federal states reached an agreement to permit online casino games on transitional basis prior to the introduction of the new regulation in July 2021, provided that operators comply with the new regulatory framework. The deadline date to achieve compliance with the upcoming new legislation on gambling is October 15.

According to reports in the German press, despite some opposition, the Minister-Presidents of the 16 federal states agreed not to pursue legal action against online slots currently being offered in the unregulated market, an amnesty idea initially put forward in July.

From Enforcement to Accommodation

The Regional Council of Darmstadt, the regulator under the Third Amendment on the State Treaty on Gambling had a prohibition order challenged in court and blocked, essentially prompting the need to reconsider its approach and move towards accommodation rather than enforcement.

Online companies currently operating in the unregulated market will have to implement steps set out in the Fourth Amendment referring to player protection guidelines and measures to tackle gambling addiction. By mid-October, all operators will also be expected to adhere to the legislation that will become effective from July 1, 2021 regarding each vertical.

New Gambling Limits

During the so-called transitional period, online slots will have to implement a €1 per spin stake limit and online table games such as blackjack and roulette will not permitted. Table games are supposed to be offered separately from slot gaming and each state may choose to grant a monopoly to its state lottery regarding this vertical.

The broad €1,000 monthly spending limit will be applied for all players, yet operators will have the option to increase the limit to players who request it, up to €10,000, provided that a maximum bet amount is set for the player as well as a special loss limit capped at 20% of the maximum spend.

Operators will also be allowed to increase the spending cap for some of their players, up to 1% of their total registered, of between €10,000 and €30,000. These players must be 21 or above and must be subdued to enhanced due diligence and subsequent monitoring.

Operators which breach any of these terms will have their temporary authorization to operate withdrawn and most probably blocked from obtaining a license next year.

Reaching an agreement was not straightforward for the states as some of them, Saarland, Saxony-Anhalt and Bremen, argued that operators offering online casino to German players should still be pursued and shut down up until the regulated market goes live. They insisted a transition period would be at the expense of customer protection and would create difficulties to reverse a decision, in case the upcoming legislation is not ratified as it is currently examined by the European Commission.

The agreement to allow online games until the new regulatory framework enters into force stirred criticism from problem gambling groups in the country. The chairman of the national advisory board for gambling addiction, Hans-Jürgen Rumpf, branded the agreement a “free ticket for illegal providers” that are now being rewarded for having operated in the unregulated market for so long.