Compliance blog

BACK TO BLOG
Germany’s Online Gambling Licence Procedure To Begin On July 1st 2021

As of 1 July 2021 a new Interstate Treaty on Gambling (ISTG 2021) will come into force across Germany which includes new licencing possibilities for sports betting, virtual slot machines and online poker for private operators.

29 Jun 2021 AUTHOR: Shenaly Amin

ISTG 2021 will include new rules for advertising, alongside a new tax regime for sports betting, virtual slot machines and online poker. Licenses will be valid for a period of 5 years and valid in all of Germany. 

Licences issued under the new regulation will not cover casino games such as blackjack or roulette.

Licensing Conditions

The licencing requirements for offering  online sports betting, virtual slot machines and online poker are very similar. The common requirements are as follows:

  • Security deposit: The applicant must provide a security deposit of at least EUR 5 million. In individual cases, this amount can be increased up to the amount of the expected monthly average turnover (maximum EUR 50 million).
  • Provision of online gambling offerings: To the extent different online gambling offerings are provided via the same internet domain, the operator must provide an independent and graphically separate area for each form of gambling. The division also prohibits cross advertising. A player must not play in different areas at the same time.
  • Upon registration on a website, the player must set a monthly deposit limit of a maximum of EUR 1,000.00. The limit applies per player and not per provider. This means that, generally, a player may spend EUR 1,000 per month across all gambling platforms.
  • The competent authority will monitor compliance with the EUR 1,000 limit via a central “limit control data base”. Providers must pay a fee to connect to and use the limit control data base.
  • With regard to online sports betting, the authorities allow more flexibility than under the current regime. Bets will be allowed on the outcome of a game as well as on events during the game or a combination of both. Also, live bets will be allowed under specific requirements.
  • For virtual slot machine games there is a minimum time per game of 5 seconds and a maximum bet of EUR 1.

Additional specific rules e.g. on KYC for players, exclusion of minors and self-exclusion rules apply.

The possibility for obtaining a licence for online casino games will be subject to separate laws of the individual federal states. Likely, the legislators will model the laws on the specifications for a license to operate a land-based casino.

Advertising Rules

Licenced operators will be allowed to advertise according to the new rules of the ISTG 2021. Only advertising that adheres to the following principles will be allowed:

  • Advertising that motivates “non-players” to participate or encourages excessive gambling is prohibited.
  • Advertising aimed specifically at minors or comparably vulnerable persons is prohibited.
  • Misleading advertising is prohibited.
  • Advertising and editorial content have to be separated.

In addition to these principles, there are additional restrictions on specific gambling services or forms of advertising:

  • Advertising via telephone calls, SMS or similar messaging services is generally prohibited, unless there is an active contact by the player or there is communication within an ongoing active contractual relationship.
  • Advertising addressed to an individual recipient requires the prior consent of the recipient (i) to receive the advertising as well as (ii) to the prior consultation of the exclusion system by the advertiser.
  • Most lotteries and certain forms of horse betting are exempt from the aforementioned restrictions.
  • Revenue share model advertising such as with affiliate links is prohibited.
  • Between 6 a.m. and 9 p.m., advertising for virtual slot machine games, online poker and online casino games is prohibited via broadcasting (i.e. tv/radio) or online.
  • Immediately before or during the live broadcast of sports events, advertising for sports betting on this sports event is prohibited on the same broadcasting channel.
  • Live coverage of sporting events must not be combined with advertising for sports betting on this sporting event. An exception is the display of live scores on the website of a betting provider.
  • Furthermore, under ISTG 2021 active athletes or sports officials may no longer be used to advertise sports betting.
  • General sponsorship of sports teams (e.g. on jerseys) will remain permissible.

In addition, the licencing authority may include additional requirements regarding the type and scope of advertising in the license. This approach is intended to enable individual risk-based regulation.

New Tax Regime

The new licencing regime will be accompanied by new tax provisions for online poker and virtual slot machines. These will be calculated on the basis of the money bet minus the virtual slot machine tax (assessment basis). The money bet includes all expenses incurred by the player to participate in the online poker or virtual slot machine game. For online poker that also includes all participation fees and all bets that are made in the course of any game. The new tax amounts to 5.3 % of the assessment basis.

Taxation on sports betting will be increased from 5% to 5.2% of the relevant assessment basis.