Currently, German law on the face of it prohibits online casino (and, in certain circumstances, online betting) but unregulated gambling on the internet still booming. Most of the providers have licenses in Malta, Gibraltar or on the Isle of Man and argue that, based on EU freedom of services principles and the alleged incompatibility of German gambling laws with EU law, they can provide their services to German customers. The German Federal Administrative Court has rejected such argumentation in 2017, but in the meantime the offers and advertising of the providers have been tolerated to some extent, and have been subject to German VAT.
Now, there seems to be movement in a new gambling legislation process in Germany. The German Press Agency (dpa) has reported a breakthrough in the negotiations of the German Federal States. It is reported that the Prime Ministers of the Federal States have reached an agreement and plan to allow online casino and sports betting. The plans, however, including strict rules on the protection of the players.
The leaked plans are as follows:
- A new central Gambling Agency for all Federal States shall be established.
- The online gambling providers must create a gambling account for each player.
- The players shall be allowed to pay a maximum of EUR 1.000,00 per month to the gambling account. In case of any profits, the players can fully use the profits for further gambling.
- The online gambling providers shall provide an automated system for early identification of gambling addicts.
- Advertising for gambling shall be subject to restrictions, it shall inter alia be forbidden to advertise for sports bets on the radio and internet between 6 a.m. and 11 p.m.
- In play bets shall be subject to restrictions.
- The gambling providers must store all gambling data to allow controls of the Gambling Agency.
The gambling providers must still exercise some patience. The process continues with hearings of the professional associations. In March, the Prime Ministers will need to agree to the new Gambling Treaty which needs to be ratified in all German Federal States. The new Gambling Treaty would then enter into force on 1 July 2021 when the interim treaty ends.
The new direction is clear, although the details might still be subject to changes, and the tax rates are not yet known. It’s therefore time for the gambling providers to start preparing for a regulated German online casino market.
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