German Casino License (GlüStV)
All online Casinos with a German GlüStV Gambling License
In Germany, the new Interstate Treaty on Gambling has been effective since 1st July. According to this, the country will now allow the licensing of online sportsbooks and casinos. In case you don’t know much about it, look no further. Here you are going to get a detailed overview of the new rules.
Introduction to the German Casino License
German lawmakers and regulators have been grappling for years to come up with the right laws to govern and regulate online gambling.
But it was only in March 2020, that the Interstate Treaty of Gambling was introduced. It became effective in July 2021. With this, online casinos are now given licensing permission.
However, The Question Is What Does the Law Hold?
In Germany, the future online casino regulations are going to experience a sea of change in the gambling industry in the country. Thus, it can be a great opportunity for established companies, as well as start-ups who want to expand their base to the biggest economy in Europe. The new Interstate Treaty on Gambling in Germany will allow licenses to provide online casino games across the country for the very first time.
In the country, gambling, offline or online, is regulated at the federal, as well as state levels. Presently, land-based casinos, online and offline sports betting dens, and horse betting have been given permission to operate but just online casino games have been given permission in Schleswig-Holstein. When it comes to the lottery games, states have a monopoly. However, the states might issue licenses for offering state lottery products.
As these newly formed regulations allow licensed operators to provide online casino games, they are attached with stipulations that are being called extremely restrictive in regards to the product offering, deposit limits, and other industry aspects, such as affiliate marketing and advertising. Nevertheless, the country does have attractive prospects for all the online gambling business owners out there.
What Are the Details of the Newly Formed Law?
On 12th March 2020, the Prime Ministers of different states in Germany came together and approved a new Interstate Treaty on Gambling that will allow licensed gambling operators to provide online poker, slots, and other casino games throughout Germany. Sportsbook operation had already been legalized in Germany.
According to this newly formed law, there are 4 different betting products
- Online poker
- Online slots
- Online table games
- Sports betting
Poker and virtual sports are going to follow an open licensing model but each state gets the provision to decide if they would like to have a monopoly on the casino table games, such as roulette or blackjack or issue a gambling license. The total licenses available are corresponding to the total brick-and-mortar license holders in the particular state.
Operators can still apply for sports betting licenses. However, they will have to follow a new set of rules and restrictions in regards to in-play betting- players get to bet only on the final outcome, the following score or goal, or a similar element of the game. Unlike poker, slots, and other casino games, sports betting licenses are limited. When it had been issued for the first time, licenses for poker, sports betting, and online slots were going to be valid for 5-years but licenses for online casino table games would be valid for 7-years.
To make sure there is gambling rules are uniform, various state regulators are going to be responsible for various issues. For instance, North-Rhine Westphalia regulators are responsible for sports betting and lottery advertising. Again, the regulators of Hesse take care of sports betting licenses. Lower Saxony regulators are responsible for payment methods blocking measures for illegal gambling crossing state lines.
Online slot games should be licensed by official regulators and considerable alterations to the game can’t be made without the permission of the regulator. Moreover, a new cultural authority is going to be established for issuing a license and ensuring compliance. Since a centralized authority to handle licenses and regulations has not yet been formed, there have been no announcements regarding the licensing fees that the operators have to pay. In regards to taxation, the Value Added Tax of Germany is applicable to casino games and online slots. Now, sports betting operators are subjected to a turnover tax of 5%.
What does it Say about Player Protection?
With the new law in Germany concerning the German casino license, many safety measures are in place that primarily aim to protect vulnerable players and prevent underage gambling. It also aims to fight the problem of gambling. If a gambler registers on an online casino for the first time, they have to set a monthly deposit limit and it should not be more than €1000. In case a player decides that they would like to increase the limit, the change will be in effect 7-days after they place the request. However, the request to lower the deposit limit will be effective immediately. A player should be able to access several gambling sites at the same time. They will be subjected to a waiting period of 5-second between the spins of online slots.
An operator will not be able to offer both sports betting or casino games from a single domain unless there is a separate section for each. So, cross-selling has been prohibited. For instance, it is not permitted to advertise sports betting in an online casino section. To counter these issues, a centre of the players excluded from it is also going to be established.
Special Permissions Requisites for Online Poker, Sports Betting, and Virtual Slot Machines
Online poker, sports betting, and virtual slot machines are subjected to special requisites. The complicated regulations are given below.
- Ownership and shareholder relationship disclosure with the applicant.
- Proof of expertise and reliability. The provider along with the responsible person he/she has appointed should be suitable enough to comply with the legal regulation and know the technical and legal requirements of the contract. This condition implies intensive checks along with several administrative procedures. It can be largely challenging for all offshore providers.
- Statement and proof of organizers, affiliates, and contracted persons that are not operating or haven’t operated prohibited gambling previously.
- Disclosure of where the operation funds are coming from, including proof of legality.
- Evidence of technical and financial capacity to operate online casino gambling abiding with the legal requirements.
- Transparency requirements have to be ascertained for supervisory authority to ensure government monitoring. It also includes appointing a representative and receiving agent in Germany for the providers that are not domiciled.
- Separating account for transactions from Germany.
- Proof of security deposit as a directly enforceable and unlimited bank guarantee of at least €5 million or higher when requested by the licensing authority.
What Are the Rules about Affiliates and Advertising?
The Interstate Treaty on Gambling in Germany is going to have a dramatic effect on affiliate marketing and advertising. When it comes to advertising, the gambling industry is going to come across some restrictions, while affiliate marketing models will have to make adjustments.
Sports betting advertising is going to be allowed in the time of any sports events just like the ban on whistle-to-whistle in the UK by UKGC. Nevertheless, unlike the United Kingdom, the sports betting dens operating in Germany are not given permission to run updated sports events for betting on it. Also, online casino, slot, and poker game advertisements are banned between 6 AM morning to 9 PM at night.
A model of revenue share payment, the common method to reward affiliates, is going to be forbidden. So, operators will have to look for some other methods to reward the affiliates when they are able to direct more traffic to their site, and cost-per-acquisition or cost-per-click is likely to be included in the revenue share model.
Special Rules for Sports Betting Platforms in Germany
There are special regulations when it comes to sports betting. What’s interesting here is the prohibition on placing a wager on the irregular behaviour of an athlete or player. This kind of regulation is going to make space for manipulation from the point of view of the legislator. Live bets are permitted when they are related to the actual results. However, bets can be placed on the following goal, too but only in games where only a few goals are scored, such as hockey or soccer. It is a regulation that is often criticized as it often leaves out sports, such as handball.
Special Rules for Online Poker in German Casino License
Special rules have been set for online poker. For instance, just human players will be able to compete against each other and the CPU is excluded. An assignment player to one of the many virtual tables with the same game is going to be random. The player will not be able to choose the table.
Also, the winning chances have to be equal and random. The winning schedule along with the game rules should be accessible. Moreover, it has been described in a way that players can easily understand. The maximum prize-winning probability and the average payout rate per one euro of the bet money have to be displayed to the player.
You have to keep in mind that virtual machines aren’t permitted to start automatically. So, the player has to confirm every round. The game has to last a minimum of 5-seconds.
Ultimately, the regulation by German regulators on the game stack limit has been criticized by many. This is just €1 and you are not permitted to bet more than this. The regulator wants to protect against bankruptcy and gambling addiction. Hence, German players will not be able to make high profits. But it can make many feel why they should be limited to a low stake.
Special Regulations for Online Slot Machines
Virtual slot machines corresponding to table games with the bankers, conventionally hosted in casinos, especially blackjack, baccarat, or roulette aren’t permitted. The regulation comes with a political background and this gives rise to constitutional concerns about impermissible unequal treatment.
A transition regime has been approved on 9th September 2020. In this period, operators can provide their services, ensuring they have proven to be compliant with the upcoming regulations.
Operators of online casinos who are not in compliance but continue to provide their services in the time of the transition period are going to be ineligible for the license when they have been offered in July 2021. The operators in compliance during this transition period are going to have a track record that will serve as proof of reliability. Nevertheless, the amount required by the operators to get ready for the transition period hasn’t been very long. And, on 1st October it had been announced that the transition period is going to start from 15th of October.
Within 15th October, all potential license applications had been expected to take out baccarat, roulette, and other table games from the platform. Again, by the 15th of December, the casino operators had been expected to set the limit of slots as €1 along with a 5-second waiting period between 2 spins. These are going to be the permanent law fixtures.
Nevertheless, the transition period rules have been criticized heavily since the operators had been left with just two weeks in order to be completely compliant. Moreover, during the transition period, a restriction has been put on advertisements. This complicates the outreach of the players. The word ‘casino’ cannot be used for the purpose of marketing. So, if affiliates have the word in their name, they will have to rebrand quickly.
German Casino License Bottom Line
The new rules have been criticized by many. According to some, the time limits and the wagering limits are going to restrict the ability of the licensed operators to cater to the demands of the market. This is going to give a leg-up to the black-market operators who are not subject to similar restrictions. Many have also raised objections to the licensing procedure, too.
But it is clear that licensed operators will have to follow these rules in every way.
German casino license FAQ
GlüStV stands for Glücksspielstaatsvertrag. GlüStV is the new German online casino regulation.
Yes, each bet is subjected to a 5% tax rate.