German licensing authority reiterates igaming warning

22 November 2019

The body responsible for processing German online sports betting licence applications has once again stressed that operators must shut down any online casino or poker products if they are to operate legally in the market.

The Regional Council of Darmstadt, representing the state of Hesse, added that any operator that continued to target German players without applying for a licence, or fail to adhere to the terms of the State Treaty on Gambling, would face severe consequences.

In an open letter to the industry, the Council said it had been forced to speak out as a result of press statements calling for a delay in the licensing process.

It noted that some sources claimed operators should hold back from applying until a decision was taken on Germany’s future gambling regulations. The third amended State Treaty on Gambling, will come into force from 1 January 2020, and expire on 30 June, 2021, with discussions between state lawmakers over the future framework are ongoing.

Others had claimed a delay was necessary as a result of a lack of transparency over what regulations would actually be brought into force. Some have questioned whether the prohibition on in-play betting, or a €1,000 monthly spending limit for players, or even the online casino prohibition, would be enforced.

“The state gambling supervisory authorities will not tolerate this,” the letter said.

“Once the third amended State Treaty comes into force, sports betting providers that continue to operate in the German market without securing permission to do so can expect to be sanctioned.”

The Council explained that all application documents and relevant information - which confirms elements such as the in-play prohibition and monthly spending limit - are all publicly available.

It warned that it would take a strict approach towards operators that failed to abide by the terms of the Treaty. It has been granted additional enforcement powers allowing it to take action against such provider, it added

“Therefore should no licence application be submitted to the Regional Council of Darmstadt, we will immediately prohibit the illicit offerings,” the Council continued. The regional prosecutor, state broadcast media regulators, and federal Finance Intelligence Unit will all be informed, and asked to initiate proceedings against the offender.

Finally, the Niedersachsen Ministry of the Interior, the body responsible for payment blocking orders, will be notified so it too may take action against the company in question.

The Regional Council’s intervention follows some operators, most notably GVC Holdings, arguing that the licensing process was likely to be derailed by legal challenges.

GVC said in August that it was confident it would be able to continue providing in-play wagering, including match outcome and goal markets - which represent around 80% of its German in-play revenue - until 2021. The operator even suggested it could be given dispensation relax maximum monthly customer loss or spending limits, or continue to offer online casino in the market.

Analysts at Regulus Partners, however, have estimated that operators could see revenue from sports betting slashed by up to 70% should the Treaty be enforced in full.