New State Treaty on Gambling: Online Casinos Become Legal

Online casinos are illegal under the current legal situation, but something is happening in gambling law. With the new State Treaty on Gaming, online casinos will become legal under strict conditions from July 2021.

Currently operators of online casinos can only purchase licenses for their offers in Schleswig-Holstein and only users residing in Schleswig-Holstein are allowed to visit the online casinos.

In Germany, the structuring of gaming law is the responsibility of the federal state legislation. These had originally agreed on the first state treaty on gaming since 2008 in order to create a nationwide framework for the organization of games of chance. However, this expired in 2011. Since July 1, 2012, the transitional regulation has therefore been subject to the gaming amendment contract. This provides for a ban on online casinos for 15 of the 16 federal states. So far, Schleswig-Holstein has taken a special route with its gaming law.

Currently legal uncertainty in dealing with online casino providers

That should change in the future. Online casinos will become legal with the entry into force of the new State Treaty on Gaming from July 1, 2021.

It is high time for that. A lack of legal regulation in the area of ​​online gambling has led to an increasing use of a large black market. There is also legal uncertainty. Although the Federal Court of Justice ruled in a recent ruling that only those who are licensed by a German authority can offer games of chance in Germany (BGH, judgment of 27.02.2020 – 3 StR 327/19), many providers continue to ignore it.

Well-known providers such as Tipico, Bwin and Bet3000 advertise online casinos nationwide – not just to citizens of Schleswig-Holstein. They have licenses from Malta, Gibraltar or the Isle of Man and rely on the fact that the ban on online casinos does not apply to them. This would violate the freedom to provide services within the European Union. Because of the unauthorized operation of online casinos, the Hamburg Interior Authority has recently filed a criminal complaint against the aforementioned gaming providers. For the first time in years, a German interior agency has been criminalizing illegal Internet gambling.

Nevertheless, the countries are divided on how to deal with the illegal behavior of the providers until the new State Treaty on Gaming comes into force.

New State Treaty on Gambling: focus on player and youth protection

With the help of the new State Treaty on gaming, the countries want to jointly liberalize the gaming market. Providers of online casinos can then apply for licenses nationwide. If they receive a license, they are also bound by strict conditions.

The new State Treaty on Gambling should focus particularly on protecting players and young people. The new regulations on player protection stipulate that a monthly deposit limit of EUR 1,000 will apply to Internet gambling. A central supervisory and licensing authority based in Saxony-Anhalt will be created. This joint gaming authority of the federal states is supposed to manage a lock file, in which players with self or third party lock are recorded.

The providers have the following obligations: You must set up a gaming account for each player. They also need to develop an automated system to determine if a player is at risk of gambling addiction. For control purposes, they must also keep all game data ready for the central supervisory authority. If necessary, the latter can then check whether the game has been manipulated at the expense of players or whether regulations have been violated.

In future, advertising can also be made for games of chance. But here too there are certain restrictions: Advertising for virtual slot machines, online poker and online casino games must not be placed on the radio and on the Internet between 6 and 9 p.m.

Not all work has been done with the new State Treaty on Gaming

In mid-March 2020, the Prime Ministers of the federal states approved the proposed regulations of the new State Treaty on Gaming by resolution. Now the treaty has yet to be ratified by the state parliaments.

Of course, the new regulations are not without controversy either. Above all, there are data protection concerns regarding the extensive inspection and monitoring obligations of the central supervisory authority.

After the lack of regulation has not done the gambling market in Germany good for years, it is to be welcomed that the new State Treaty on Gaming will come into force in July 2021. This is a crucial step towards more player and youth protection.

Many dubious providers of online casinos will then no longer be able to operate in the legal gray area. Instead, providers can legally generate their income in the future if they adhere to the requirements. Players no longer have to go criminal.

After that, however, the countries may not put their hands in their laps. In order for the regulations to be applied in practice, the federal states and their authorities must implement the new contract consistently.

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