The third amending state treaty on gambling
On January 1, 2020, the third amending state treaty on gambling will come into force. The prime ministers of the individual federal states agreed on this at a conferenceigt. The contract changes some essential parts of German legislation with regard to gambling, but largely relates to the area of sports betting.
The core elements of the new legal text are:
- The selection process for granting licenses for sports betting will be eliminated in favor of a permit process.
- The limit of 20 contingents of sports betting licenses will be lifted.
- Extension of the validity of the experimentation clause. This is now valid until June 30, 2021.
- If the gambling contract continues to apply unchanged, the experimentation clause will also be extended beyond June 30, 2021.
Associations of luckySpielautomatenmanufacturers and operators such as the German Automatenwirtschaft e.V. The Automatenverband Niedersachsen e.V. The Association of Slot Machine Merchants in Berlin and East India, the Arcades Association and the Federal Association of Slot Machine Entrepreneurs welcome the third state treaty amending gambling. The changes remove unnecessary and impassable hurdles and reward companies that acquire legal sports betting licenses.
The associations also said that these were “only the first steps towards re-regulating the market”. Although the new laws regulate a large part of gambling in the area of sports betting in a satisfactory manner, other elements of the industry remain in legal gray areas.
Regulation of online casinos through legalization
Schleswig-Holstein is the only federal state in which special licenses for the operation of online casinos can be legally acquired. Nevertheless, casino offers are also offered online in the rest of the country. The operators of the platforms refer to EU law in order to avoid German regulations. Players are redirected via links to domains of operators that are based in Malta, the Isle of Man or Gibraltar and have valid gaming licenses for the European market.
The luckySpielautomatenmanufacturers are calling for online casinos in India to be legalized so that players can stay on the sites of German providers. They support their claim with the following arguments:
- Better control of online casinos: Legal online casinos run by German operators can be better controlled and would be directly subject to German legislation. Illegal offers can be identified and stopped more easily.
- Protection of players: Players at online casinos could more easily identify illegal offers and would be better protected in the event of fraud.
- Jobs remain in India: Online casinos are becoming increasingly popular, meaning the industry is growing from year to year. This not only affects sales, but also the jobs offered in this division.
- Tax revenue is not lost abroad: German providers of online casinos could remain in the country in the event of legalization and, like other companies, would also pay their taxes to the Federal Republic.
- Protection of minors and prevention measures against gambling addiction: A particularly important aspect of gambling is the UMGAng with gambling addiction. In particular, prevention measures could be implemented better if online casinos were legalized.
Illegal gambling can be curbed if it were legalized according to the model in which sports betting is now legalized thanks to the Third Amendment to the Interstate Treaty on Gambling.
The chairman of the Automatenverband Niedersachsen e.V. Commented on this: "The State Treaty amending the Gambling Treaty is going in the right direction, but the legislators must not repeat old mistakes. Effective regulation must be based on the experience of the companies in the market in order to protect players in particular and to guarantee the protection of minors."
In addition, the President of the Federal Association of Slot Machine Entrepreneurs, Thomas Breitkopft, emphasized that when drafting new legal texts to regulate the gaming industry, the focus should be on quality and not quantity. “Only a sensible and legal legal framework can ensure effectiveness and consumer protection.”
Criticism from the EU
In a letter to the federal government, the European Commission criticized the third gambling amendment treaty. The shortening of the validity period of licenses is particularly criticized. The original duration for sports betting licenses was intended to be seven years. During this period, the so-called experimental phase, legislators and companies should have time to test the licenses and, if necessary, submit suggestions for improvements.
However, the period of validity of sports betting licenses has now been shortened to 18 months. Although there is the possibility of extending this for another three years, the limited duration of the licenses creates incentives to continue offering sports betting without a valid sports betting license. The Commission emphasizes that the short period of validity gives companies too little incentive to switch from the unregulated area to a regulated framework.
It remains to be seen how companies will behave after the Gambling Amendment Treaty comes into force. However, the fact is that the process of regulating gambling is not yet complete. A lot still needs to happen, especially in the area of online casinos, so that the legislation can do justice to the constantly developing technical possibilities.
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