Paradise Papers: Real Revelations or Storm in a Teacup?

These findings are not new

However, what is being presented here as a revelation has been known for a long time. Gauselmann bought Edict Egaming from the state-owned Hamburg casino in 2008 precisely for the purpose of digitizing its games. These have been available to play in numerous online casinos for years. The problem lies more in the simplified media representation of the connections. Namely the claim that these activities and online casinos as a whole are illegal. It is true that you cannot obtain a corresponding license in Ireland and therefore turn to third countries. But the legal situation is far more complicated. The casinos usually have valid European licenses and rely on the freedom to provide services within the EU. Furthermore, Gauselmann himself does not operate the games. The company sells licenses of its games to other companies and is thus indirectly involvedigt. The accusation that the company is “involved” is perhaps justified in this respect, but it is unlikely to play a legal role. Above all, the online commitment of a Spielautomatencompany like Gauselmann is in no way surprising.

Particularly because the German authorities are informed about these activities by Gauselmann and see no need for action, as the company emphasized in a statement. Inaction by the authorities is not yet an indication of legality, but on the one hand it indicates the complexity of the matter and on the other hand it should draw the media's attention to this very fact. The impression remains that something that has been known to industry experts and authorities for years is being artificially exaggerated into a scandal. The situation is similar in the case of banks. The investigative journalists made random deposits at online casinos and were amazed: it worked, and through German financial institutions. From this, the authors derive support that is “systematic”.

The problem lies with the state

Here too, the allegations are directed at the wrong address. Because the banks simply don't know which gambling providers are legal and which are not. Some bookmakers and casinos still have old licenses from Schleswig-Holstein, many have no German license at all and many are still stuck in the procurement process that has been stalled for years. Some also offer several different forms of gaming, for example permitted but not permitted sports betting and the controversial casino games.

In any case, providers would only be excluded from payment transactions if specified by the Banking supervision (BaFin). However, this did not happen. The institute in turn refers inquiries to the responsible countries that are responsible for gambling supervision. We have been waiting for a list of legal providers for years in order to be able to act in accordance with the law. The NDR therefore contacted the Lower Saxony Ministry of the Interior and requested information about such a list. The authority stated that there was no such thing and that no work was being done on one.

Paradise Papers only show symptoms

This is the problem with German online gambling. The state, represented by the states, is unable to present coherent legislation. There are permissions and prohibitions, but both are simply not implemented. The result is a chaotic situation that harms both companies and consumers. There is a lack of sensible consumer protection for online players, as there is no need to regulate what is forbidden.

But there is no denying the need for gambling, especially digital games. The fact that the legislature steadfastly refuses to accept this reality is what is leading to the rampant growth in the industry that journalists now believe they have uncovered. However, the findings from the Paradise Papers regarding online gaming only point to symptoms; they may also show morally questionable behavior. But the underlying disease is political inaction.

Paradise Papers: Real revelations or storm in a teacup?