Slots Gridlock Handcuffs German Licensees Against Black Market, Officials Say

February 9, 2023
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A logjam in approving individual slots games is keeping German licensees from offering enough choice to fend off black-market competition, industry representatives have said.

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A logjam in approving individual slots games is keeping German licensees from offering enough choice to fend off black-market competition, industry representatives have said.

German gambling executives got a rare opportunity to hear directly from officials at the Joint Gambling Authority for the Federal States (GGL), who were appearing at meetings at ICE London gambling conference on Wednesday (February 8).

The 16-state Germany gambling treaty requires each game to be approved by the regulator.

Some 23 slots licensees and 650 games have been approved so far, of 3,500 submitted, the regulators said.

But that is a deceptive number, as each slots game needs to be approved individually for each operator, despite duplication, said Dirk Quermann, president of the German Online Casino Association (DOCV).

Although a gambling operator might previously have offered 600-800 slots games, they are now typically limited to 80-100, he said.

“They have the licence to operate, without any games, which doesn’t make any sense,” Quermann told the audience.

Only one licensee, Saxony's state-owned online slots site, has as many as 300 games approved, he said.

Panel moderator Joerg Hofmann of MELCHERS law firm called the provision “weird”.

“If [slots game] Book of Ra has been tested ten times, it has to be tested 11 times, 12 times too,” he said.

Hofmann said he did not blame the regulator for slow approval of games, as it is merely applying the interstate gambling treaty as written.

Volker Tittel, the GGL’s head of licensing, tried to explain why the approval process was taking longer than expected.

Games are being disqualified for violations such as improperly using the words “online casino” or that game descriptions are hard to find, he said.

Games typically take a half an hour to evaluate and the office has only five staff members reviewing games for 25 hours a week, Tittel said.

Quermann pointed out another treaty quirk over which the regulator has little or no control.

Table games such as roulette, blackjack and baccarat have been set aside for licensing by the 16 states.

So far, only two states, Schleswig-Holstein and North Rhine-Westphalia, have indicated their desire to license the games and neither has yet launched licensing.

“Everyone wants to play roulette, live, or blackjack, and there is no legal offering,” he said.

That fuels the black market, he said.

Sports betting, which has been legal longer than online slots and poker, has a similar problem in that the list of permitted bets on sports is limited, especially for live or in-play bets.

The restricted list led to an avalanche of lawsuits against the previous sports-betting regulator, Hesse’s Darmstadt Regional Council. A partial settlement eased some restrictions for operators who agreed to it.

That tight list has contributed to a “serious decline” in betting, according to Mathias Dahms, president of the German Sports Betting Association (DSWV).

Stakes dropped from €9.4bn in 2021 to €8.2bn in 2022, he said.

“They didn’t stop playing; they are playing in every other market,” Dahms said.

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