On 01 July 2021, the ” State Treaty on the re-regulation of gambling in Germany” (State Treaty on Gambling 2021 – “GlüStV 2021” for short) came into force. It marked a milestone: for the first time, a regulated framework for most forms of online gambling was created in one of Europe’s largest markets. This had been preceded by years of negotiations between the 16 German States.
A little over a year after the State Treaty came into force, an interim conclusion can be drawn:
- The opening of the market is working, even in the “transition phase”. When the GlüStV 2021 came into force, the new Joint Gambling Authority of the Federal States (GGL) was also established. At the start on 01 July 2021, it has taken over some of its future tasks – the rest will follow until 01 January 2023. Until that date, however, some transitional responsibilities will continue to exist, while others have been newly created.
Practical results are becoming visible also in this “transition phase”: In the nationwide licensing procedure for virtual slot machine games, the first seven licenses have now been issued by the Saxony-Anhalt State Administration Office. More are to follow in the near future. The regulation of sports betting, on the other hand, will continue to be overseen by the Darmstadt Regional Council until the end of the year. The extension of existing sports betting licenses is also being prepared there and decided by vote of the College on Gambling (Glücksspielkollegium).
In the area of enforcement, the desired progress is also becoming apparent: The new central databases created by the GlüStV 2021 to enforce deposit limits and prevent parallel gambling have been set up. In addition, the transfer of competencies to the Joint Gambling Authority is on schedule: On 01 July 2022, it assumed responsibility for payment blocking and IP blocking, among other competences. As a result, it has directly launched enforcement proceedings against a lottery betting operator.
- The Federal States retain a decisive role. The new Joint Gambling Authority of the States (GGL) centralizes many tasks, especially from 01 January 2023. However, both in the decision-making structure of the GGL and in the regulation of entire forms of gaming, the Federal States continue to have central competences.
In the structure of the GGL, the role of the States is institutionalized: Through the Administrative Board (Verwaltungsrat), they are involved in all decisions that affect the fundamental direction of the authority. In addition, they can adopt binding decision-making guidelines for the Presidents. This requires a two-thirds majority on the Administrative Board.
The Federal States also retain decisive powers on whole forms of gambling. In addition to regulating the landbased business, the regulation of online casino games (i.e. online table games) also falls within their competence. Around half of the Federal States have already decided on a form of regulation. While Bavaria or Thuringia, for example, plan to establish a state monopoly, Schleswig-Holstein and North Rhine-Westphalia want to grant a limited number of licenses to private operators.
- The current design of the regulation is not “set in stone.” The GlüStV 2021 grants the GGL a central role in market monitoring and individual decisions. This includes, among other things, the decision on whether esports events can be bet on. Other new developments are also monitored ana analyzed by the GGL.
In parallel, the Federal States and the GGL are working together on an interim report to evaluate the State Treaty. This will be finalized by the end of 2023. The observations and assessments of the gambling supervisory authorities can be expected to identify further areas for action.
In summary: The German gaming market now offers a stable regulatory framework. With the preparations for the further transfer of competences to the GGL, this will now be further developed. For new market participants, this makes an active communication of their regulatory priorities all the more important – both directly towards the GGL and vis-à-vis central Federal States.
Are you interested in detailed information on German gambling regulation? Together with Hogan Lovells, we will take a look at the status quo of the market and upcoming regulatory changes on Tuesday, August 23 at 3pm CEST. To register for our one-hour webinar, please click here.