The reorganization of Germany’s online gambling market was a multifaceted process that spanned the better part of eight years and ran into many drawbacks and barriers until German lawmakers created what they believed was a viable regulatory framework .
The country has just entered a transition period during which online gambling operators and their software providers will be able to adapt their products and operations to a permanent regulatory regime that will take effect in July 2021.
But what will this new regime entail and what will it mean for German operators, iGaming software solution providers and gamers? Here is a more detailed look at the reshuffle of the German sports betting and online gaming market.
The new state treaty on gambling
After two failed attempts in previous years, the heads of Germany’s 16 states finally agreed in March 2019 on the provisions of the so-called Third State Treaty on Gaming that should pave the way for the regulation of sports betting in the country.
The legislation went into effect on January 1, 2020 to serve as a temporary framework under which sports betting licenses would be issued to interested operators and these operators would prepare their operations vis-à-vis Germany for permanent law, Glücksspielstaatsvertrag 2021, which was and still is established. which will enter into force in July 2021.
The vast majority of state leaders held the position for years that online casino games and online poker should not be legalized as part of the local market reorganization, despite calls from operators and some legislators.
However, to an extent that surprised many, they finally agreed this spring that the two practices should be allowed as of July 2021.
Initially, online gambling operators currently serving German players and who wish to continue operating the market after its reorganization were told that they should refrain from offering online casino and poker products in the country until the law allows it.
German authorities warned that any attempted challenge would not be tolerated and could result in companies not obtaining sports betting and gaming licenses to operate in a regulated environment.
Following calls from industry stakeholders for gradual new market regulation that would give operators enough time to adjust to the new rules, Germany’s 16 states announced in September a call Tolerance policy according to which companies would not be prosecuted for offering online casino games and poker to German customers before July 2021, provided they make their services comply with the provisions of the new gambling law.
Operators were given until October 15 to make the necessary adjustments, leave the market or face legal proceedings.
The policy of tolerance
Germany’s operators had to make a number of changes to their iGaming operations to please local legislators. It should be noted that these changes related to online casino and poker products, as online sports betting is already legal in Germany under the temporary law that came into effect earlier this year.
The betting companies were ordered to they will eliminate all board games of their lobbies, including blackjack, roulette, and craps, as well as live dealer versions of these. This practically means that they can only offer online slots to German players.
Germany’s new gambling law contains a set of restrictions on the game of slot machines and operators have been instructed to ensure that all their games strictly follow these restrictions.
One of the new rules forces operators to implement a € 1 limit per spin on slot machine bets for all your games. Also, players should not be able to play multiple games at the same time.
Other restrictions include:
- A € 1,000 limit on monthly deposits, although that limit could be increased to € 30,000 for certain players
- An interval of five seconds between each spin of the reels
- Autoplay must be disabled in all slot games
- Operators must implement a reality check every 60 minutes, with a mandatory five-minute trial period before players can resume play
- A panic button should be displayed at all times, allowing players to self-exclude themselves from an online casino whenever they feel the need
- Demo games should not be offered
For sports betting, in-play bets will not be allowed under the new rules.
Operators and suppliers welcome the Tolerance Policy
The Tolerance Policy was good news for operators interested in operating in the regulated market in Germany. GVC Holdings, which has been extremely active in voicing its opinion on what German lawmakers are doing right or wrong, said the new policy finally brought “the long awaited clarity to the future of online gambling regulation in Germany. “
However, some expressed concern that operators and their software vendors had a very short period of time to implement all the necessary changes. The German association of online gambling operators, Deutscher Sportwettenverband, said the October 15 deadline was “Unrealistically tight” and that, under normal circumstances, it takes operators several months to complete the “complex IT projects” that involve adjusting their operations.
Despite the tight deadline, several online gambling providers have announced that they have ensured that their products are fully compliant with the new German rules and that they are poised for further growth in this lucrative market.
Microgaming was one of the first providers to adopt the new rules and launch a solution which makes its products comply with the German Tolerance Policy and the general rules of the game. The company also said it would make more than 150 slots available to its customers in the German market and its players, including the hit titles Book of Oz, 9 Masks of Fire and Bonanza.
ORYX Gaming, another major iGaming content provider, has adjusted too much “a considerable proportion of [su]
content ”to fully comply with Germany’s transition period guidelines.
More recently, online casino games maker Betsoft Gaming said that it has made sure to comply with all the requirements set by the German authorities and that “if more changes or new requirements come into effect, we will comply with the same. speed and efficiency. “
The game developer also said that at least 20 key online gambling operators have informed it that they would re-sign under the stricter regulations.
The new rules basically end affiliate marketing
Gambling operators may not be entirely happy with the new rules and the many restrictions they are required to adhere to if they want to operate in the German market, but there is a closely related sector that will be quite negatively affected by the new regime.
A provision of the new gambling law that prohibits operators use affiliate links or paying marketing partners a percentage of their German income from customers referred by those same marketing partners has thrown German-oriented affiliates into growing concerns.
Over the past few weeks, various gambling operators have informed their affiliate partners that they should stop advertising in Germany. For example, GVC sent an email to its affiliates instructing them to remove “All banners and promotional texts related to casino and poker products of all GVC brands ”from its German websites, to stop any“ networking, application or social media activity ”for GVC brands targeting German players and to“ stop any media purchases ”directed to German poker players and online casinos.
GVC recently obtained four sports betting licenses from German regulators for its brands bwin, Sportingbet, Ladbrokes and Gamebookers.
Similarly, bet365 told its affiliates to stop advertising in Germany and to also “ensure that they do not promote other competitors’ game offers when promoting bet365.”