Niedersachsen minister: more payment blocking orders to come

3 February 2020

Lower Saxony’s (Niedersachsen) Minister of the Interior and Sports, Boris Pistorius, has issued a letter to the German banking industry warning banks against processing payments for unlicenced gambling websites and saying further payment blocking orders may come soon.

Pistorius wrote to members of Germany’s five leading banking industry associations to remind them that under Germany’s third state treaty on gambling, payment providers may not facilitate payments towards illegal gambling.

As part of the treaty, the Lower Saxony Ministry of the Interior and Sports was charged with enforcing this ban.

In June 2019, the ministry issued its first payment blocking order to an unnamed payment provider. While it has not yet issued another, Pistorius warned that “further prohibition orders are expected to follow.”

Pistorius said that the ban on processing these payments was an essential piece of the country’s gambling framework.

“This prohibition on participation applies immediately and obliges the payment service providers to take appropriate measures on their own responsibility,” Pistorius said. “This is based on the consideration that an essential part of the infrastructure required for the operation of unauthorised gambling would be lost and that the action against unauthorised gambling could be sustainable if payment service providers behaved legally and did not make corresponding payments.”

Pistorius noted that as it was difficult to take action against offshore gambling operators, stopping payments was the most effective way to crack down on illegal gambling such as online poker and secondary lotteries. 

“Since the gaming providers are usually based abroad (especially in Malta and Gibraltar), where they largely elude the access of the German supervisory authorities, the legislators also made the parties involved in payment transactions directly responsible,” Pistorius said.

“It is up to the individual company to decide which measures it makes sense to take to effectively and permanently comply with the ban.”

The Third State Treaty on Gambling will only last until 30 June, 2021, after which the Fourth State Treaty will come into effect. The current draft of the treaty would retain the monopoly structure of Germany’s state lottery industry, while also lifting prohibition on online casino and allowing for sports betting, legalised in the third State Treaty to continue.

However, the draft treaty does include several restrictions, including a ban on live betting and over/under betting, as well as a €1,000 deposit limit across all operators. in addition, the current version of the treaty would include a €1 per spin stake limit on slots, a ban on autoplay and an extension of the state monopoly on online casino, or “virtual bankholder games.”