A license is officially issued to a party wishing to offer games of chance in land-based casinos or gambling halls, but also, for example, online.
The Interstate Treaty on Gambling
You don’t just happen to qualify for a license. You must meet strict requirements and these are constantly tested. One of the most complex licenses in the world is that of Germany. The German license is also known as the Interstate Treaty on Gambling. It has been subject to many changes over the years. What are the conditions of this license?
Germany is a large country and can be a dominant player in the gambling market. Yet it was only in 2012 that official regulation around gambling began, the Interstate Treaty on Gambling or des Glücksspielstaatsvertrags. This legislation is complicated, which is why full legalization of gambling has never really taken off over the years.
In practice, for example, physical and large casinos may have to comply with regulations from the Ministry of the Interior. This is while the smaller and very much present gambling halls in Germany have to comply with legislation of the local governments or states. With 16 different states in Germany, it is difficult to align legislation and the country has noticed this.
Most recently, in September 2017, the parliament of Schleswig-Holstein voted against legislation that had still been fully amended in March of 2017. That alone was not a setback for national regulation. Germany’s northernmost state also came up with plans to introduce its own gaming regulations. What exactly is this Interstate Treaty on Gambling about?
With the advent of the internet, much has changed in the gambling market. It is now possible to play online casino games such as roulette and blackjack, but you can also gamble online on major sporting events. The Interstate Treaty on Gambling had exactly that in mind; legalizing and regulating online gambling on sports. After the plans were first put on the table in 2012 and had already been amended several times in terms of content, the idea was that all 16 states of Germany would approve the law before officially moving on to this regulation. Salient detail from September 2017; the state of Schleswig-Holstein was the last state that had yet to give its approval.
Complying with European legislation
The Interstate Treaty on Gambling was amended once again in March 2017 to comply with all European legislation on online gambling. With this, the German government hoped to finally introduce the official legislation in 2018. Within the law it was also stipulated that a maximum number of 20 sports betting licenses were allowed to be handed out to local partners.
Already in June 2017 it became clear that the state of Schleswig-Holstein, which had just gained a new coalition, were not exactly happy with the content. The Interstate Treaty on Gambling did not come as the final no vote in September 2017 came as a surprise. This was a big disappointment though.
The Interstate Treaty on Gambling only provides for the online possibility of gambling on sports and many states in Germany are divided on this. They believe that sports should not be the only factor to be discussed within legislation, but that online gambling is much larger. Thus, in practice, the Interstate Treaty on Gambling is a very limited license that does not cover the entire gambling market.
The contents of the Interstate Treaty on Gambling
The Interstate Treaty on Gambling includes the payment of a tax on winnings, the protection of gamblers, and the integrity of various sports. This makes the law too restrictive for online casinos to make a competitive concept.
Especially when compared to gambling regulations in surrounding countries such as Denmark, France, Poland or England, the German gambling regulations are too strict and leave little room for online casinos to really play a significant role. Also, the local market in Germany would not benefit sufficiently from this nationwide legislation.
Within the current plan that was put on the table in March 2017, an unlimited number of online casinos are given the space to offer their games of chance and thus there is no cap on the number of licenses that may be issued. This would further liberalize the gambling market in Germany and increase competition between online casinos, which can ensure better offerings. For the time being, however, the Interstate Treaty on Gambling has not yet been passed in Germany and so online gambling on sports remains semi-legal for a while.