German Trade Groups Plead For Flexibility On Rules

February 8, 2024
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Two German trade groups claim the Joint Gaming Authority of the States (GGL), the German gambling regulator, is taking such strict interpretations of statutes that it is strangling the legal market.
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Two German trade groups claim the Joint Gaming Authority of the States (GGL), the German gambling regulator, is taking such strict interpretations of statutes that it is strangling the legal market.

“We are asking them not to be the Guardians of the Galaxy, but the guardians of the legal market,” said Dirk Quermann, president of the German Online Casino Association (DOCV).

“With every law, there is room for interpretation,” said Mathias Dahms, president of the German Sports Betting Association (DSWV). “If the authority thinks they are strongly bound by the politicians, they need to go back to the politicians and say this and this and this does not work.”

“This market is currently drifting away into the black market,” he said.

The two men were speaking at a joint German-Austrian regulatory update held as part of ICE London 2024 conference on Wednesday (February 7).

Dahms cited the fact that the overall betting tax was down 5 percent last year as evidence of the problems.

Online slots were much worse, declining by almost 39 percent, according to Ministry of Finance data

The DSWV has presented a study claiming that the channelisation of online gambling is only 51 percent, which clashed with the GGL’s estimate that less than 5 percent of online gambling went to the black market.

The black market for online slots might be as high as 70 percent, Quermann said.

Industry concerns about rules that it deems needlessly strict include €1 stake limits and tough provisions for raising €1,000 monthly stake limits for those who can afford higher limits.   

Sports-betting operators also need a much wider range of bets, which must be approved individually, according to Dahms.

Earlier, industry executives had heard from two GGL officials, and the sharpest comments from the two trade group officials came only after they had left.

The GGL has launched 45 enforcement actions, mostly for advertising infractions, and is itself facing 130 lawsuits, said Sebastian Buchholz, head of licensing and market supervision.

He also said the regulator allows 122,000 different sports bets.

But one executive said that estimate is based on counting each permitted bet in each game as a separate bet.  

The menu of bets permitted in Germany is so small that it is about 13 percent of what is allowed in the UK market, Dahms said.

Sina Rencz-Baasch, who heads the department for online slot games, discussed the approval process for games, which must be approved individually for each company.

Of 5,500 games submitted for approval, 1,300 have been approved, with 300 rejections, the officials said. About 1,600 game applications were withdrawn, apparently because they would not have qualified.

Approvals have been streamlined by a checklist, but many applicants have disregarded the list, with flaws including forbidden auto-play functions, she said.

“It’s easy to criticise the authority, but operators have an obligation to communicate smoothly,” she said, adding that “principles cannot be disregarded”.

The Austrian Association for Betting and Gambling (OVWG) has different problems.

“We have two jurisdictions; one is over-regulated, the other is under-regulated,” said Joerg Hofmann of Melchers law firm.

The trade group advocates an open licensing system for online casinos, which is currently a monopoly held by Casinos Austria.

Claus Retschitzegger, president of the OVWG, argued that its market share is so low — perhaps 35 percent to 40 percent — that Austria is “de facto an unregulated market” for online casinos.

“Why are there no adequate regulations in Austria?” he said. “Why do we regulate every Amazon package, every internet phone call but not online gambling?” he said.

Before the meeting, Retschitzegger said the trade group is hoping for some change after a new government is elected in the autumn.

Any new government is likely to take action, he said, because the Casinos Austria monopoly on online casinos expires in September 2027.

Since the monopoly was granted, the company is no longer Austrian-owned, and a Czech company, Allwyn, has become the majority owner.

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