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Germany’s Gambling Committee, a group of 16 state regulators, has said it believes a transitional arrangement on virtual slots and poker has been dead for a year, and anyone offering such games without a licence can be considered “unreliable”.
The risk of being declared “unreliable”, and therefore a poor candidate for a slots or poker licence, “applies regardless of whether the application for a licence under gaming law would generally be approvable”, the committee said.
The strict stance raises the prospect of gambling authorities — perhaps the new “super regulator” which begins to assume some authority today — being buried in lawsuits like the current sports-betting regulator has been.
One of the just three successful virtual slots licensees, Tipwin, has already said it wants to review “ancillary provisions” in the licences to see if they merit “judicial review”.
The bluntness of the committee’s statement stunned some attorneys.
“We were astonished about the de facto withdrawal of the interim regime regulations” by the Gambling Committee, said Fabian Masurat of Taylor Wessing law firm. “Particularly against the background of the long licensing proceedings.”
Still, Masurat said he and his colleagues assume that the Joint Gambling Authority of the Federal States (GGL) will take into account which companies have complied with the transitional regime and which have submitted applications.
A few dozen online gambling companies have been offering online slots and poker since October 2020, under a transitional arrangement agreed by state chancelleries that they would meet strict standards including €1 slots stakes.
But a year today (July 1) after the launch of the interstate gambling treaty, only three virtual slots applications have been approved, of more than 60 submitted.
That would appear to put companies still awaiting approval in an awkward position from today, when the GGL begins assuming powers, including enforcement of licensing with website blocking authority.
But a June 22 statement by the Gambling Committee, or Glücksspielkollegium, says that those offering games of chance from July 1, 2021 “without being the holder of the required licence are generally to be regarded as unreliable”.
This applies regardless of the transitional, or so-called circular agreement, of September 8, 2020, the committee said.
“Anyone who offers public games of chance in Germany without the required licence can also be prosecuted,” the statement said. “This also applies regardless of whether the application for a licence under gaming law would generally be approvable.”
Attorney Martin Arendts said he thought it was “a little bit strange” that the Gambling Committee is offering opinions publicly, as its role is meant to be advisory.
But Arendts had previously warned that the transitional arrangement was merely a “gentleman’s agreement” without legal status.
Masurat said companies’ focus should be on “constructive exchange” with authorities aimed at implementing rules “in a lawful and practical manner”.
Still, “it cannot be ruled out that, as with sports licences, another legal wave against the ancillary provisions will set in”, he said.
On January 1, 2023, the GGL gains additional authority over sports-betting licensing, currently with Hesse’s Darmstadt Regional Council and virtual sports and poker licensing, currently with Saxony-Anhalt’s administrative offices.
Adding to the lack of clarity surrounding the status of those awaiting licences is the fact that the Gambling Committee's oversight of gambling is scheduled to end with the GGL's ascension to full control.
The GGL is expected to give its views in the coming days.
Malta-based Tipwin said it was “very satisfied and proud” to have been the first sports-betting company to receive a virtual slots licence from Saxony-Anhalt, but “we will now examine all ancillary provisions in this permit and decide whether individual provisions will be challenged for judicial review”.
"We are building on a constructive exchange with the responsible authorities in order to implement the requirements that are now arising in a legal and practical manner,” said Damir Böhm, head of the legal department.
As slots licensees, Tipwin joins Mybet and Mernov, a joint venture between gambling giants Gauselmann and Novomatic.
Ruleo Alpenland, based in Salzburg, Austria, acquired the Mybet name after the previous incarnation went bankrupt a few years ago.
The licences expire in June 2027.
The sports-betting arena has been in turmoil, as Darmstadt Regional Council has said it has been hit by more than 100 lawsuits from the three dozen companies it has approved for sports-betting licences.
In June, a German court stopped the council from enforcing the highly restricted list of in-play and pre-game bets permissible with sports-betting licences, pending a full court hearing.
This week the Saxony-Anhalt administrative office said 71 companies have applied for virtual slots and poker licences and eight applications have been withdrawn.
Twelve applications have been approved by the Gambling Committee, and one was rejected, the office said. Some of the approved applications have not yet been announced.
