Are the winnings in online gambling limited

Online gambling is to be re-regulated in Germany

News from 11/26/2020

For a long time there was a discussion in Germany about legalizing online gambling in all federal states. A few weeks ago, as part of the new State Treaty on Gambling, which is due to come into force in July next year, a transitional regulation was created which represents a practical test for providers of online gambling.

The legal situation so far
Until this toleration phase started in October, online gambling was only allowed in Schleswig-Holstein. The background to this is that the regulation of games of chance is a matter for the countries. However, with the advent of online casinos and online sports betting providers, it has become increasingly difficult to control them. Many providers operate their businesses on the basis of an EU gambling license, which is often issued in Malta, where the regulation of gambling is less strict than in Germany. In the course of time, a large black market emerged that was not regulated in Germany. Since the providers of online gambling are also often based abroad, the state also missed out on tax revenue.

The federal states saw a need for action, especially in the area of ​​player protection, so in recent years they have tried to find a common and uniform way to legalize online gambling in Germany. The result is the State Treaty on Gambling, which is to be voted on in January. If it receives a viable majority from the federal states, it will come into force in July 2021.

Objectives and contents of the new State Treaty on Gambling
The core of the State Treaty on Gambling is the protection of young people and gamblers, which is intended to prevent gambling and gambling addiction from developing. Furthermore, illegal gambling is to be prevented and the offer limited. For example, it should not be possible to play classic casino games such as blackjack or roulette in online casinos. The focus will be on slot games.

By binding the providers to a legal set of rules, the legislature promises to have more control over the course of online games of chance. The aim is to ensure that the games are played fairly and that they are not cheated.

Online gambling providers will in future have to apply for a license in Germany if they want to offer their games here. The EU licenses will then no longer be valid.

The State Treaty provides that players may not exceed a deposit limit of 1000 euros per month. This should protect the player from financial ruin in the event of a gambling addiction. So far, there have only been such limits with very few providers.

In order to monitor the flow of money, an authority is to be established that will keep a database where all of the players' deposits are recorded - across platforms, so that it is impossible for a player to simply log into another online casino when they reach the deposit limit has exceeded with another.

The database should also contain a lock file in which players who show suspicious behavior with regard to gambling addiction are recorded. Such a file already exists for offline casinos.

The operators of online casinos must also regularly display a notice on their platforms that informs the player about his previous winnings and losses. In addition, there should be a panic button that a player can press at any time and thus lock himself for 24 hours.

In addition, the maximum bet per game should be 1 euro.

Criticism from all sides
The new State Treaty on Gambling is celebrated by politicians as a success, but there are also critical voices.

The Advisory Board on Gambling Addiction, for example, complained that the tolerance phase that had now started would amount to an amnesty for the previously illegal online casinos. Many doubt that the providers will stick to the rules in the future and fear that the illegal gambling market will nevertheless continue to develop.
Data protectionists also criticized the introduction of a player database that is to be monitored by an authority that does not yet exist. You doubt whether the draft law is compatible with the General Data Protection Regulation.

The State Treaty on Gambling does not meet with much approval from gamblers either. The arbitrary € 1,000 deposit limit is criticized, which neither protects low-wage earners from financial ruin nor deprives illegal casinos of their livelihoods. On the contrary, it is feared that the black market will experience a boom, since very high earning players would not be satisfied with the 1000 euro limit.

According to the gaming community, the EUR 1 stake limit per game and the ban on jackpots would also play into the hands of the black market, where much higher winnings can be gambled on.

Since some federal states have already announced that they will vote against the contract in January, it is not yet set in stone whether it can come into force in July 2021 as planned. Until then, the relevant bodies will in any case take a very close look at the operators of online casinos during the tolerance phase. (prm)