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Payment Systems Are Loopholes: Germany’s Online Casinos Find Ways to Operate

20 June 2020, 11:31
Votes: 1

Despite the prohibition of online casinos in the territory of Germany, gambling companies search for loopholes and find them successfully. As recent country’s gambling news shows, regulators and payment solution providers are ready to turn a blind eye to their operation.

Payment Systems Are Loopholes: Germany’s Online Casinos Find Ways to Operate

The coronavirus pandemic has given a considerable boost to the online gambling market in Germany. People wanted entertainment, and virtual casinos became the best substitution for offline activities. However, it doesn’t mean that gambling has a legislative basis, vise versa, it isn’t a legal business in the country.

Operators use legitimate law infringements

Only two sectors of the gambling industry are allowed in Germany: the national lottery and monopoly casinos. Privately-owned casinos are strictly prohibited, but it doesn’t prevent them from operating within the period of already eight years. Payment service providers and BaFin, the financial regulator, can cancel transactions, but they don’t do it. The providers benefit from such operations because they serve as a mediator between a casino and a customer.

Investigations show that it is difficult for states to control law compliance. For example, Hanover’s regulatory authorities banned PayPal only after eight years since the license expiration date. At the same time, BaFin still insists that it doesn’t detect any money laundering cases connected with the gambling industry. Payment solution providers continue denying their involvement in this market. For instance, Visa has confirmed that it doesn’t provide services to virtual casinos. However, as PayPal’s case shows, many of them flout the law.

Read more: Are gambling regulations in Europe strict?

Read more: What are GGR and NGR in the gambling industry?

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