First German Online Slots Licences Could Finally Emerge, Says Lawyer

March 24, 2022
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The award of Germany’s first virtual slots licences could be days away, but delays and uncertainty are expected to persist at least until a federal council steps back from gambling regulation in 2023.

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The award of Germany’s first virtual slots licences could be days away, but delays and uncertainty are expected to persist at least until a federal council steps back from gambling regulation in 2023.

Germany’s federal gambling regulator is currently gearing up to take over monitoring of the industry in a limited capacity from this July, before fully taking control on January 1, 2023.

Oversight of the German gambling market is currently split between several bodies operating in different states, while major decisions, including the granting of nationwide licences for so-called “virtual slots” games, require the approval of a federal council, the Glücksspielkollegium, composed of representatives from each of Germany’s 16 states.

Those states have wildly different views on gambling and decisions require a two-thirds majority vote, leading to constant delays, said Joerg Hoffman, a gambling lawyer and partner at MELCHERS law firm.

Hoffman, speaking at a Gambling in Germany webinar on Wednesday (March 23), noted that the council was meeting that day and could approve the very first licences for offering virtual slots games across Germany, months after they became theoretically available via the new interstate treaty.

However, he warned that “we cannot predict the timing”, despite the meeting and momentum from regulators, because of the fractious nature of the council.

The online betting market has also been hampered by similar delays. Operators have had to wait months for the creation of an approved betting catalogue, which appears as though it will be highly restrictive when compared with other European markets.

“The result is more than a compromise to satisfy the most reluctant regulators,” said Hoffman.

However, from 2023, the new Joint Gambling Authority of the Federal States (GGL) will absorb the functions of ring-fenced regulators currently based across the country and many of the responsibilities of the council.

Next year, state representatives’ roles will be reduced to functions such as issuing guidance to the regulator on how to implement the aims of German gambling law, said Hoffman.

“I personally expect that this will make things easier,” he said.

Currently on the federal council’s plate are guidelines on advertising compliance.

Specific details on advertising rules were absent from the 2021 treaty and a full update has been subject to delays, but is expected to emerge in early July, said consultant Tilmann Becker, speaking on the same panel.

However, Becker said he expects that guidance to be far from the final word on gambling ads in Germany.

Previous court rulings have suggested that gambling ads should only be visible to those who have already decided to gamble and do nothing more than describe the unique features of a game.

“It remains to be seen whether the gambling authority will stick to the principles of the last decade, that advertising may only inform about the availability of a game, but may not incite or encourage gambling,” Becker said.

There is also a question of whether advertising will be treated differently for those states who have opted to run table games under a state monopoly versus nationally licensed private companies.

“You can be sure that advertising will be one of the most popular topics in the courts” over the next few years, said Becker.

From July this year, the GGL will take over some limited areas of gambling regulation, mostly related to enforcement against offshore operators.

These include payment blocking measures, which are currently handled by a separate authority in Saxony-Arnholt, where the GGL is also based. IP blocking orders will also begin being issued by the new federal regulator from that date.

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