Germany makes slow progress on regulation

Germany makes slow progress on regulation

Tuesday, November 8, 2016 Posted by Andy McCarron
Ministers agree to look at online casino

There was a cautious welcome for the limited progress signalled after the leaders of Germany’s 16 lander agreed to drop the planned limit of 20 sports-betting licences and signalled they were willing to consider the potential legalisation of online casinos.

The state ministers met up at the end of October to consider measures to break the log-jam over potential regulation of the online gambling sector. The amendments to the German State Treaty on Gambling answered some of the criticism from the European Court of Justice (ECJ) and would see the licensing regime look at “minimum standards” being applied for all licensees.

Michael Stulz-Herrnstadt and Christoph Engelmann, partners at DLA Piper in Germany, said the moves had the potential to end the regulatory deadlock, in particular with regard to the potential for licensing online casinos.

“At last the prime ministers ask the gambling authorities to examine which regulatory measures could improve the regulation of online casinos considering the experience in other European countries,” they said. “This decision hints in the direction that even licensing of online casinos might be possible in the future.”

Other measures agreed was a move from stake limits of €1,000 to loss limits to the same level and the suggestion that a new regulatory body to be given the task of improving enforcement around illegal and unregulated gambling.

Speaking to TotallyGaming.com, Melanie Ellis, senior associate at Harris Hagan, said the possibility of licences being available at some point now looked “promising” following the discussions.

“In particular, the decision that licences should be awarded on a qualitative rather than quantitative basis, to any operator who meets certain minimum standards, is very welcome,” she added.

“This decision has obviously been driven by the criticism from the European Commission and Court of Justice which has given operators based in other Member States justification for continuing to accept bets from customers located in Germany, and the ensuing difficulties in enforcing the law as it currently stands.”

Ellis added that operators should welcome the news from the meeting but that they shouldn’t be too hopeful over timings for any new licensing regime. “It is likely to be a few years before any licensing regime goes live,” she said. “It is possible that those operators who fulfilled the requirements of the previous (now abandoned) sports-betting licence tender will be given some form of interim authority to operate although this should not be expected in the short term.”

At DLA Piper, Stulz-Herrnstadt and Engelmann noted that the meeting did reach an agreement on the sports-betting licences, however, approval will be hampered by needing the approval of every single German state “and not every state has an approval process in place.”

Still, there was an acknowledgement among German-facing operators that progress was being made, albeit at a glacial pace. One source within one of the market leaders suggested the news was a “gradual step in the right direction.” “But there is still a long way to go.”

Meanwhile, Klaus Fahrnberger, head of investor relations at Bet-at-home which operates into Germany under a Maltese licence and is currently the sponsor at Hertha Berlin and Schalke 04, said the company “appreciated the resumption of the licensing process and the latest suggestions.”

“The most important progress is the plan to analyse the development of online casinos, which hasn’t been covered by the recent license process,” he told TotallyGaming.com. “Experiences from other EU Member States shall be taken into account.”

Totally Gaming says: People have been measuring their careers by the time it takes for some European countries to get around to opening up their online gambling markets. Germany is perhaps the best example of how the wheel of deregulation can often get stuck on hold for indefinite periods of time. Though the latest news does represent progress, it remains a slow and painstaking process.

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