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German Betting Market: Transition to New Era

2 April 2021, 09:35
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Not so long ago, the information about gambling companies, which were granted a license under the transitional agreement, appeared in German news about the betting industry. Christoph Suess, the press officer of the Darmstadt Regional Council, has answered several questions about the first licensees, regulations, requirements for operators, and the future of the bookmaking vertical in the country.

German Betting Market: Transition to New Era

Several months ago, the first betting licenses were granted to operators. What does this historic step mean for the German betting market?

By granting the first betting licenses, a long-lasting hold-up in regulating the German sports betting market has come to an end. Since 2012, the German states have been trying to regulate that market. The first concession process has been concluded by the Hessian Ministry of the Interior in 2014, yet it has been blocked judicially for years. The reason for this has been the limitation to 20 concessions due to the then-effective German State Gambling Treaty. Providers who should not get a concession went before the court. However, the lawsuit wasn’t finally decided back then, which was why no concessions could be issued at all.

What are the most important, essential, and crucial requirements for operators who apply for a sportsbook license?

  • Proof of own financial capability.
  • In order to guarantee the exclusion of minors of age and blocked players, identification and authentication are a must; guidelines of the Commission for Youth Media Protection for age verification have to be followed.
  • Safe identification and authentication are also necessary for the prevention of illegal financial transactions.
  • Connection to the comprehensive German-wide player exclusion system OASIS as well as enforcement of an individual social concept with measures for the prevention of gambling addiction.
  • For IT security reasons, ISO 27001 standard has to be complied with; furthermore, regular pen tests have to be carried out.
  • Proof of utilization of safe payment measures.

What will a regulatory body in every region do to ensure a safe gambling environment for players?

A central body for all German states will watch sports and horse bets as well as lotteries on the Internet. Terrestrial gambling offers will be regulated by the bodies in charge on the individual state level due to their respective laws.

There are almost 500 000 people in Germany who suffer from gambling addiction. Will the regulated betting market contribute to the solution to this problem? If yes, how?

The above-outlined prerequisites for providers will contribute to that goal. Furthermore, providers must take part in the evaluation system ARGUS. That makes it possible for the regulatory body to evaluate the data transferred by providers with anonymized information on gaming and betting procedures, payments, account standings, and players. Evaluations will be carried out through reports on the surveillance of compliance with youth protection as well as gambling addiction and prevention of money laundering guidelines of the license.

What are the major restrictions for betting websites and products?

Important restrictions are the limitation of the betting program as well as of the maximum betting sum. Furthermore, an advertisement for the respective gambling offers will be restricted.

What do you expect from the legal and well-managed betting vertical? Can it become a very profitable market, which, of course, will increase financial injections to coffers?

We expect decreasing illegal offers and, at the same time, attractive gambling offers that ensure youth and player protection. A legal offer will also contribute to tax incomes.

Besides, what are the taxes for the sportsbook operators?

Providers of sports bets must pay a 5% tax on wagers.

What about sports integrity and match-fixing? What measures will be taken to ensure fair and not fixed events and betting results?

Every provider of sports bets must utilize at least one independent monitoring system to avoid gambling fraud. This cooperation must be proven by the regulatory authority. Furthermore, the limitation of the betting program contributes to the exclusion of competitions that are prone to manipulation from the very beginning. Yet it is in the interests of the provider not to accept bets on manipulated games.

Read more: Is it possible to launch an online casino in Germany?

Read more: Advantages and disadvantages of betting on sports

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