Until recently gambling industry (and especially iGaming) was present in Germany in a very limited form. Before the past year, online gambling in the country was permitted only in a Schleswig-Holstein state. Fortunately, in the summer of 2021, all changed.
In march 2020 governments of German states passed a new framework of gambling legislation “The Fourth Interstate Treaty on Gambling”. The new regulations entered into force in past July. At the same time the new body Glücksspielbehörde, which is responsible for iGaming control, started its work. So, what innovations did the aforementioned law bring with it?
Now it’s possible to obtain an online gambling license in Germany, which will allow operators to engage players from the whole country. It sounds like a brilliant opportunity for iGaming operators. Nevertheless, it is worth paying attention to a number of restrictions and requirements that will have to be met to get the license and run a virtual gaming business in the jurisdiction.
Germany Online Gambling Regulations
The licensing authority is located in Halle (Saale). The body accepts applications from online casino owners with the physical office in European Union Member Countries or those in the European Economic Area. According to the laws, foreign applicants’ platforms must have a German-language version.
Operators can get a gambling license in Germany for the following virtual activities:
- Online casino board games (poker)
- Video slots
What is required to get the license?
Firstly, the applicant needs to pay an insurance deposit. The amount of this payment is not less than €5,000,000.
Before submitting an application for a German gambling license each operator should ensure that his iGaming platform corresponds to local rules. The main of them are:
- Separation of different games is mandatory. It means that if you offer several gambling activities on one domain, you must create independent graphical areas for each of them. Cross-promotion between different iGaming types is strictly prohibited.
- To protect players from potential gambling addiction and bankruptcy, platforms are required to oblige every user to set up a monthly deposit limit. The maximum possible amount of it is €1,000.
- Operators are also required to comply with the prohibition of parallel play. Players shouldn’t play on different websites at the same time.
- It’s mandatory to follow the KYC policy, collect, check and keep personal information about customers. Operators must regularly request this data and not allow unverified users to play.
- After an hour of online gaming, every gambler should see an alert about time spent on the website. For slot machine players there is a special cooldown pause (5 min) before continuing.
- Operators must prevent minors from accessing their sites.
After obtaining a German gambling license, iGaming platform owners are required to follow several marketing rules:
- No ads for people under 18
- Gambling can’t be presented as a way to resolve financial problems
- The ads of online casinos or betting platforms can’t be shown from 6 am to 9 pm
- Cross-promotion on the iGaming platforms is banned
Online casinos and slot machines are a subject of German VAT taxation (19%). Bookmaking platforms should pay a 5.3% turnover tax.
Despite the establishment of a new gambling regulator, many industry issues in Germany are still decided mainly at the regional level. This model reminds the one in the USA, where politicians of states are responsible for the regulation of the iGaming sphere.
Now let’s take a closer look at the types of gambling licenses in Germany.
Which Licenses are allowed in Germany?
The ITG act issues online poker licenses. This is a variant of the famous game, in which people play against each other at a virtual table. Games against the computer cannot be licensed and remain prohibited.
Video slots license
German legislation defines virtual slot machines as online copies of land-based ones. Holders of this type of online gambling license in Germany should remember some limitations: users can bet only €1 per game and a minimum average game length is 5 seconds. Also, operators cannot offer jackpots: that is, winnings or parts of them cannot be accumulated for future winnings. Bets and winnings must be listed in EUR, no conversion is allowed.
Operators, who have a German online gambling license can only accept bets approved by the competent authority. It’s allowed to place bets on the final result or the next goal, the next set or a similar component of the final result in sports. Betting on competitions where minors take part is strictly prohibited. It’s also impossible to make bets on amateur sports excluding major interstate or international events.
Where to Play Online?
Now Germany is one of the most promising European iGaming markets. According to the surveys, 12% of German players visit online casinos and 15% make bets every day. It proves that the state’s decision to soften the virtual gambling policy was right.
It doesn’t mean that Germans didn’t like iGaming earlier, they just played in “black” casinos. This was bad not only for the players, whose psyches and bank accounts were in danger but also for the state budget, which was missing a huge part of the taxes. It is now finally possible to play online on numerous officially licensed German sites. It remains to be hoped that the government of the largest European country will continue to look toward the development of the industry.