Up until this year, online gambling in Germany has been regulated on a state-by-state basis, with different authorities imposing different rules and guidance in different locations. While these authorities have always had to adhere to Germany’s centralized legislation on business and commerce, they have had a degree of autonomy in how gambling is regulated within their own jurisdiction. In most cases, the Ministry of the Interior in each respective state oversaw gambling legislation.
On July 1, 2021, however, this changed. This was when the Interstate Treaty on Gambling (ISTG 2021) took effect in Germany, permitting nationwide licensing for online casinos and sports betting providers in the country.
A Nationwide Focus for Gambling in Germany, Bringing New Opportunities for Investment
Under the latest changes to online gambling regulation in Germany, gambling operators will be able to apply for licenses that allow them to provide sports betting, online poker, and virtualized slot machine games right across the country. Licenses will be valid for five years in total before they need to be renewed. This immediately achieves a more convenient way of doing business for domestic operators. They no longer have to apply for individual licenses — and juggle complex licensing requirements across different jurisdictions — streamlining the entire process.
But it is international operators who perhaps have the most to gain from these regulatory changes. While operators already working within the domestic market will have a degree of familiarity with licensing requirements across different individual states, international betting providers may find it more difficult to navigate this distributed landscape. The introduction of single, nationwide licenses certainly makes Germany a far more attractive location for outside investors and businesses looking to extend their influence into new markets across Europe.
Online gambling providers will have to pay a security deposit of at least EUR 5 million to obtain licensing and must have clear distinctions between the different forms of gambling offered on the site. For example, the providers of online casino offerings must be hosted in a distinct area of the website from sports gambling products, although these areas may share the same root URL. These are just a few of the rules that providers will need to adhere to in order to achieve licensing.
Several Exceptions to ISTG 2021
There are exceptions to the new rulings, however. Under the ISTG 2021, online casino games will not be licensed on a nationwide basis, including games such as blackjack and roulette. These will continue to be licensed on a state-by-state basis and will be governed by individual authorities in these respective states. Any live broadcasts of games taking place in physical casinos — and any betting taking place on these games — will similarly be excluded from nationwide licensing.
Despite these exclusions, the new ruling will make for interesting reading for gambling product providers in Europe, who may find a wealth of new opportunities within the German market.