German treaty moves ‘fall short’ say operators

German treaty moves ‘fall short’ say operators

Friday, March 17, 2017
Amendments passed this week represent minimal progress

The approval by the German states of amendments to the state treaty on gambling was welcomed as a positive step by industry participants but they cautioned that more action is needed before the country ends up with a regulatory system for online gambling that is fit for purpose.

The measures to change the proposed Interstate Treaty on Gambling were formally accepted by the prime ministers of the 16 states this week. It means there is no longer a maximum amount of licences on offer under the new regulations which will come into force on 1 January, 2018.

However, there is still no provision for online casino in the treaty and the 35 sport-betting operators that previously passed the licensing requirements will still have to pay a security deposit of €2.5m before they can begin operating under an interim licence.

Mathias Dahms, president of the German sports-betting association (DSWV), said the “minimal” revisions to the treaty were a “small step in the right direction but it falls short”. “The restrictive regulations for sports-betting operators derive from an outdated monopoly system and have not been capable of creating an attractive and legal range of games,” he added.

There was a similar reaction from the chief executive of mybet, Markus Peuler, who said the revisions were not a long-term solution. “There are some parts of the market, like online casino, where the federal states do not offer a solution,” he told TotallyGaming.com. “The European Union has already raised concerns about the new State Treaty. This, amongst other things, might be a reason.”

He added that “improvements” would be needed, a call which was echoed by Dahms. “We are only at the beginning of a much-needed reform process,” he said. “The present regulations are out of date in many areas.” He suggested the authorities should look to the operators to help develop the regulations.

Despite industry concerns about the treaty remaining half-baked, the prime minister of Saxony-Anhalt, Reiner Haseloff, said in a press statement that announced the formal adoption of the changes that the regulation of sports-betting was now concluded and that “transparency for operators and third-parties is achieved.”

“At the same time, the supervisory authorities can effectively take action against unauthorised sports-betting offers,” the statement added.

But there was scepticism from Peuler at mybet that the treaty changes would make any difference to the existing grey market in Germany. “This is nothing we expect in the short term,” he said. “Of course, we hope that providers like us who apply for a licence and are willing to get regulated will benefit. But this will to a great extent be in the hands of the customers, but also in the hands of the regulators especially with regard to enforcement.”

Dahms, meanwhile, suggested the German authorities should look to the example set by regulatory regimes set up in other countries in Europe. “The experience of our members in other European countries shows that successful regulation exists only where providers and authorities cooperate confidently and work together for the environment. We are available at any time for this type of co-operation.”

The interim licences will run for one year from January 2018. Subsequently an open tender process will be undertaken for any further companies that wish to apply for licences. No details of this process have been released. The states have also yet to agree the details of a new national supervisory body to take over from the current joint states oversight body.

A spokesperson for the Remote Gambling Association pointed out that "speed has hardly been a primary concern" for the German authorities to date. "The fact they will still need to be ratified by the various state parliaments and transposed into state law before becoming effective suggests further delays could well lie ahead," they added.

Totally Gaming says: The tortuous progress of the German Interstate Treaty on Gambling has been the cause of much quiet angst in online gambling circles. The continued buoyancy of the grey market is demonstration enough of the potential value of a fully-regulated system but it seems clear the changes approved this week do not go far enough. The next move will come from the European Commission but whether that will provide further meaningful progress is open to question.

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