DSbV calls on payment providers to stop igaming transactions

4 August 2020

German gaming machine operator association Deutsche Spielbankenverband (DSbV) has called for payment providers to stop processing illegal gaming payments and for an end to “incoherent case law” around online gambling in the wake of the Wirecard scandal.

DSbV chief executive Otto Wulferding pointed out that Wirecard, which filed for insolvency after announcing that €1.9 billion supposedly held in its accounts “may not exist”, was heavily involved in online gambling in Germany.

"With Wirecard, the topic of monetary transactions for companies such as online casinos is of high importance," Wulfdering said.

Wulferding added that it was a positive development to see that Visa and PayPal have both stopped their involvement with online gaming operators.

"It is to be welcomed that Visa, for example, no longer wants to process deposits and withdrawals for currently illegal gaming providers in Germany," he said. “Online casinos without a German licence are evading the regulatory framework in Germany.

"They do not meet the requirements that apply to licensed casinos, which allows customers to carry out their bets and thus deposits and withdrawals safely and reliably.”

In addition, Wulfdering called for an end to what he described as “incoherent case law” surrounding online gambling. Currently, German states are discussing a potential transition period that would allow operators to continue to offer online casino before the vertical is legalised in July 2021.

The discussions are taking place ahead of the implementation of the Glücksspielneuregulierungstaatsvertrag (GlüNeuRStV) from 1 July 2021, which is currently being considered by the European Commission and expands the online market beyond sports betting for the first time.

These discussions arose after a legal challenge in the state of Hesse, which saw proceedings suspended, allowing the two parties to negotiate a compromise agreement, in an unnamed operator’s appeal against a prohibition order issued by the Regional Council. Prior to this, operator body the Deutscher Sportwettenverband had called for such a period.

Payment service providers are legally obliged to refrain from making payments in connection with unauthorised gambling. Should they fail to comply with these regulations, they risk being banned from operating in Germany.

Niedersachsen, granted the power to issue blocking orders to payment providers for all of Germany, issued its first payment blocking order in June 2019 to an unnamed company, thought .

Although the European Gaming and Betting Association (EGBA) criticised this decision and called for a “fundamental rethink” of enforcement of gaming regulations, Niedersachsen’s Minister of the Interior and Sports Boris Pistorius warned in February of this year that “further prohibition orders are expected to follow”.

In April, Niedersachsen issued a prohibition order to another payment provider.

However, with the new Fourth State Treaty on Gambling set to take effect on 1 July 2021, two Freie Demokratische Partei (FDP) state MPs in Niedersachsen questioned whether the state government’s measures were necessary in June.