Understanding Gambling Laws & Regulations in Germany Comprehensive Guide

“Social” gaming does not fall under the definition of games of chance and, hence, lacks specific regulation. As an exception, the Interstate Treaty restricts offering free-to-play versions of virtual slot machine games if they are offered on the same website as the virtual slots. To that extent, such free-to-play versions are subject to the supervision of the Saxony-Anhalt regulator. Promoting responsible gaming and ensuring compliance with stringent regulations will be essential for maintaining player trust and sustaining long-term growth in the German online gambling industry.

New Licensing Laws for Online Gambling and Online Casinos in Germany

When applying, applicants must submit multiple documents, including responsible gambling policies, terms and conditions, and data protection measures, via the official email portals for sports betting and horse betting. In Germany, no localities have been given favoured status for gambling such as in other countries, tourist islands, reservations and integrated resorts. Only Germany’s northernmost state, Schleswig-Holstein, granted online casino licences in the past and allowed its residents to participate in the respective gambling offerings that were licensed solely on a federal state level. These licences were issued between January 2012 and February 2013, when Schleswig-Holstein pursued its own gambling policy before joining the other 15 states in the Interstate Treaty, and were reinstated in May 2019 by local legislation. According to the transitional rules under the Interstate Treaty 2021, Schleswig-Holstein licences valid on 30 June 2021 continue to be valid for a transitional period until a licence is granted under the Interstate Treaty 2021, but not beyond 31 December 2024.

Another strategy is to target players not by brand but by offer, promoting eye-catching sign-up bonuses and free sports merchandise around major sporting events. Although both the DSWV and the DOCV emphasise their commitment to stringent player protection rules, both associations say that the current framework is working against this goal by making the regulated market far less attractive for players. There also been reports that LUGAS, the monitoring system for sports betting operators, has crashed several times during major sports events, leaving regulated operators unable to process bets when they are most likely to turn a profit. Another major concern for operators is the draconian scheme for offering sports betting markets, which betting companies say is stifling innovation. “Some politicians are now starting a debate about sports betting advertising, which is the most effective tool that legal operators have to draw attention to the legal products,” he says. In the view of operators, Germany is still a market plagued by challenges – but one that nonetheless offers opportunities.

Requirements and Regulations for Sportsbooks

• Although subject to controversy, the majority of German courts have so far regarded poker as a game of chance and not a game of skill.
• The Glücksspielstaatsvertrag (“Interstate Treaty on Gambling”) was introduced to find a new legal solution.
• Some of these suggestions are likely to be adopted by the federal states when they amend the law this year.
• Only Germany’s northernmost state, Schleswig-Holstein, has granted online casino licences in the past and allowed its residents to participate in the corresponding gambling offerings, which were licensed solely at state level.
• The Interstate Treaty aims to create a safer environment for players while also opening up new opportunities for operators.

Germany introduced sweeping reforms to its gambling regulations in 2021 with the Fourth Interstate Treaty on Gambling. The legislation has reshaped market conditions for online gambling, particularly for online sports betting businesses. As the market continues to evolve, private operators looking to enter the German market must meet demanding financial and operational requirements to succeed. The new German Interstate Treaty on Gambling (ISTG 2021) entered into force in July 2021, allowing private operators to offer their services on the German market to a larger extent.

One of the earliest documented gambling activities was the then-popular game of Glückshaus (House of Luck), a medieval dice game where players would roll dice to win coins or other prizes based on the outcome. One of the key changes in the new treaty, set out by the German government is the responsibilities of operators in this region. They are now required to implement various databases to ensure that the online gambling market is properly monitored.

Overview of the German Gambling Market

Operators must demonstrate full compliance with local regulations, including transparency in financial transactions, adherence to player protection measures, and restrictions on advertising. Germany’s online gambling market, valued at nearly €2.9 billion in 2021, is experiencing significant growth and offers considerable potential for operators. A pivotal moment occurred in 2021 with the legalisation of online gambling through the Fourth Interstate Treaty on Gambling, which brought regulated online casinos, poker, and sports betting under a tightly controlled licensing system, a substantial shift from prior restrictions. Compliance with local laws and the Interstate Treaty on Gambling is non-negotiable for operating an online casino in Germany. This includes implementing security measures, independent game testing, and anti-money laundering compliance. The regulatory authority, GGL, ensures that operators organizing online gambling activities do so in line with strict licensing requirements.

Furthermore, not all Federal States have yet declared their final decision whether it should be possible for private operators to apply for an online casino games license. The federal states Schleswig-Holstein and North Rhine-Westphalia have already stated that they are planning to issue licenses to private operators and will grant 4 (Schleswig-Holstein) or 5 (North Rhine-Westphalia) licenses. Furthermore, the security is required to cover state payment claims, not just player protection. In that case, one might wonder why such a high level of background research is involved in the application process when an applicant could simply put forward cash. Germany claims that its regulation, similar to other regulated jurisdictions, aims to guide players away from the black market towards the regulated market.

Virtual slot licences have been available since the Interstate Treaty entered into force. Key restrictions include a EUR 1 stake limit per spin, five seconds minimum spin duration, no autoplay function and the prohibition of jackpots. Skill games and competitions with no element of chance do not fall under the definition of games of chance and hence are not affected by gambling regulation. The same applies to brokers of state lottery products, which can be privately owned entities, unless they operate in multiple German states, where the gambling regulator of Rhineland-Palatinate is the authority responsible for nationwide licensing and supervision.

Following this initial licencing, Schleswig-Holstein withdrew from giving more licence and largely adopted the legislation in place. Though the regulatory environment is demanding, the German market does offer a stable and secure playing field. The Fourth Interstate Treaty on Gambling has brought much-needed structure, allowing operators to enter a market where player protection and responsible gambling are front and centre. The 5.3% tax on gross gaming revenue is higher in comparison with other European jurisdictions. Still, it is also fair to say that Germany’s massive player base and the disposable income levels of its citizens generally offset this, creating strong profit potential for those who comply with local rules.

This shift enhances trust in the online gambling market, allowing players to enjoy their favorite games with confidence that their rights are protected. Although ultimately subject to a case-by-case analysis, where German jurisprudence may provide some guidance, if only to a limited extent, social games will mostly be classified as skill games. At the time of writing, the Saxony-Anhalt regulator has handled more than hundreds of cases in connection with unauthorised games of chance. In addition, it was announced that a “focus prosecutor’s office” for enforcement against illegal games of chance shall be established. Compliance with anti-money laundering laws is essential, requiring robust systems for transaction monitoring and reporting.

Back in December 2023, an interim evaluation of the Interstate Treaty was launched to assess the effectiveness of current regulations and make recommendations for improvements. Some of these suggestions are likely to be adopted by the federal states when they amend the law this year. DOCV (Deutscher Online Casinoverband) and local lawyer Michelle Hembury of Melchers Law believe an updated Interstate Treaty could address IP blocking, as well as deposit and stake limit confusion. Again there is uncertainty around how and if operators can apply for increased stake limits across their iCasino products. Similarly, Priglinger-Simader told viewers the GGL’s administrative board aimed to tackle the question of operators applying for increased slots stakes in its next meeting in September or October.

The GGL seems to recognize this as well, and an interesting case study will be moving forward to demonstrate to the regulator how this method will work in practice. A group of operators who already hold licenses (for which they have provided security in the form of a cash deposit) will submit a change to their financial security arrangements. This will trigger a formal response from the GGL will decide whether to approve or deny this new method of providing curacao casino license the security. The method presented to the GGL entails a new form of guarantee, designed to be proportionate for all companies, big or small, which combines a foundation for the safeguarding of player funds with a bond insurance product.

The requirements for obtaining a license to offer online sports betting, virtual slot machines and online poker are very similar and only vary in specific topics. The most important aspects of the common requirements can be found here.Existing online sports betting licenses under the previous ISTG expire at the end of 2022. The application process for new online sports betting licenses under ISTG 2021 that apply from 2023 onwards is currently ongoing, and we expect the first licenses to be issued in Q4 2022.The first licenses for virtual slot machines have already been issued. The authorities publish an official list on the internet in which the operators and brokers of games of chance are listed who have a license or concession pursuant to ISTG 2021 (so-called white list). The Gemeinsame Glücksspielbehörde der Länder (GGL), fully operational since 2023, is now the central federal gambling authority responsible for issuing licences and enforcing compliance nationwide. Additionally, a 5.3% tax is levied on all stakes in sports betting, virtual slots, and online poker.

Exceptions only apply for licensed traditional lotteries, horse racing, sports betting, virtual slot machine games, online poker and to a limited extent online casino games. The responsibility for regulating gambling is vested in regulators at state and municipal level. Further, some authorities have been appointed by all states to act with central responsibility for a certain sector.