Regulatory Update Germany – New State Treaty on Gambling enters into force on 1 July 2021

With the ratification by the Landtag of Saxony-Anhalt on 21 April 2021, the new Interstate Treaty on Gambling 2021 (ISTG 2021) has passed the final hurdle for its nationwide entry into force on 1 July 2021. A new Interstate Treaty became necessary due to the scheduled expiry of the current ISTG 2012 at the end of 30 June 2021.

Statutory amendments in gambling law

The new ISTG brings numerous statutory amendments in gambling law, in particular

  • a licensing regime not only for sports betting, but also for online slots and online poker, including advertising

  • online casino table games such as roulette or blackjack will be subject to state-by-state regulation

  • EUR 1,000 monthly deposit limit across all operators and products

  • EUR 1 limit per spin on online slots

  • operators’ obligation to implement various databases in order to enable the competent authorities to monitor the online gambling market, i.e. the already known OASIS player blocking system, a so called Safe-Server (which evaluates the data collected by the provides for the purpose of gambling supervision) and central files (‘Zentraldateien’) that control deposit limit compliance for players as well as prevent parallel gambling with multiple gambling providers,

  • a new central regulatory authority that will be established in the state of Saxony-Anhalt,

  • creation of new legal bases for supervisory measures (Aufgaben im Rahmen der Glücksspielaufsicht), in particular for measures against services providers with the aim of blocking unauthorised gambling offers (IP-blocking),

  • introduction of a system of administrative offences with a fine range of up to 500,000 EUR

It shall be noted that under the new ISTG 2021, there will still be no licensing requirement for B2B suppliers to the gambling industry.

How to deal with sports betting licenses?

Following the new regulation, many questions are already now arising, especially how to deal with the sports betting licenses which have only recently and for the first time been granted under the current ISTG 2012 (and possibly still will be, as various applications have not yet been decided by the competent authority in Hesse). The new ISTG 2021 provides for transitional provisions for a transitional period for the sports betting licenses that have been granted under ISTG 2012. These sports betting licenses are timely limited to 30 June 2021. The new ISTG 2021 stipulates that until new licences are issued, the existing sports betting licenses shall remain valid until 31 December 2022, but shall already be subject to the new regulation.

Changes for online gambling operators

In the course of this new regulation, the federal states have also drafted a bill containing provisions for a taxation of virtual slot machines and online poker which may bring significant changes in particular for online gambling operators. Currently, the federal Horse Race Betting and Lottery Act includes provision on horse race betting, lotteries and the taxation of sports betting. This Act shall be supplemented by provisions for the taxation of virtual slots and online poker. The assessment basis for the slots is the stakes paid less the tax. The tax rate is 5.3 %. The bill has now been forwarded to the German Bundestag for approval.

Once again in the history of German gambling regulation, the question arises as to whether the new provisions are suitable for achieving the objectives they pursue. We advise our clients on all regulatory issues in the gambling and gaming law. We also support you with specific questions about taxation and licensing regime.

Frieder Backu,
Certified Expert for IT Law, Certified Expert for Tax Law