Online gambling: more clarity for players with the new state gambling agreement?

It is estimated that there are around 4 million gamblers in Germany who regularly practice their hobby. In addition to brick-and-mortar casinos, online casinos are a point of contact. However, the latter is not entirely problem-free. Even though online gambling is popular in Germany, it is legally a gray area and is only allowed. The new State Gambling Act of 2021 will determine how online gambling will be legalized. This may lead to more clarity and security for both players and online casinos.

Online gambling in Germany - current situation

Gambling in Germany has a loyal following both in brick-and-mortar casinos and online. However, the dream of big casino winnings has a catch for those who prefer to play online: the legal situation is unclear.

This is especially true because European and German regulations contradict each other when it comes to the legal regulation of online gambling. On the one hand, this concerns the German State Gambling Act, which has been in effect since 2012. It regulates, among other things, in section 4 that the organization or hosting of public gambling on the Internet is prohibited. On the other hand, this is the European freedom of service provision, the details of which can be found online. The rules of the freedom to provide services are set out in Articles 56-62 of the Treaty on the Functioning of the European Union. The freedom to provide services, in turn, allows online casinos located in other European countries to offer their services in Germany as well. Interested in the financial journeys of top athletes? Explore this link - https://www.klamm.de/news/die-11-reichsten-gluecksspieler-ein-blick-auf-ihren-nettowert-54N81ab0.html for a comprehensive breakdown of the net worth of the 11 richest players, shedding light on the diverse avenues that have propelled them to financial success.

Special provisions have caused further uncertainty

The fact that some online casinos have been allowed to operate legally in Germany also raises further uncertainty. For online casinos in Schleswig-Holstein, a special provision was in place. For some time, they were allowed to try their luck for players who reside or are permanently residing in Schleswig-Holstein.

This special provision is no longer in effect, but it still causes confusion: casino licenses issued for a limited period were valid only in Schleswig-Holstein. However, they were used through television and other advertising to attract players outside of Schleswig-Holstein to online casinos. This was no longer allowed. What makes the situation worse today is that the respective casino offers are still available online despite the fact that the licenses have expired.

All in all, this leads to a situation that is equally unsatisfactory for reliable casino providers, such as those found here, and for players. On the one hand, EU law prohibits restricting the Internet and depriving German users of EU-licensed online casino offers. On the other hand, participating in online casino games is prohibited in Germany, although players do not actually face any penalty. In addition, it is tacitly allowed to offer German online casinos that do not have a valid license. It is a confusing situation that requires legal clarification.

Online gambling: a confusing legal gray area

As we have already seen, online casino providers usually have EU law on their side. Nevertheless, German law ignores players who use online casino offers that are actually prohibited in Germany. Non-compliance occurs even if gambling that is illegal under German law is actually punishable.

Despite the confusing situation, the gambling market is still thriving. This applies not only to traditional casinos like the one in Baden-Baden, but also to online gambling. Germany is currently losing tax revenue that could be generated from online gambling due to the current (but ignored) ban on online casinos. Ultimately, tax revenues always go to the states from which foreign online casino providers obtained the necessary casino licenses. In the case of online casinos operating in Germany, this is usually Malta, Gibraltar, or the Isle of Man.

Unclear legal situation brings disadvantages to online players

Conflicting regulations not only lead to a decrease in tax revenues for the German state. The confusing situation also has disadvantages for players. Although online gamblers themselves are not prosecuted, they operate under legal uncertainty. They usually do not have to fear any fines. However, inadequate legal regulation of online gambling also carries some risks for you:

Uncertainty caused by providers from abroad: Anyone who participates in online gambling has to believe that their online casino is actually reputable. After all, there is no German authority that would check the provider.

Winnings can be kept: Everyone who plays at an online casino also wants to win. However, winning brings with it additional uncertainty. After all, German banks are not actually allowed to participate in illegal gambling. If the winnings are transferred to the player, the bank can theoretically refuse deposits or withdrawals, as well as withhold or freeze winnings.

This already shows that true German gambling regulation is more than necessary. However, in 2021, this may finally take the form of a new state gaming agreement.

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Changes due to the new State Gambling Agreement of 2021 

The State Gambling Compact creates the legal framework for gambling in the Federal Republic of Germany. The current state treaty entered into force in 2012 and regulates online gambling, which is effectively banned, inconsistently across the 16 federal states.

However, now the ambiguity should be over. During the preparatory discussions for a new state gambling agreement, the federal states agreed to allow online gambling in the future. At the end of 2019, the Prime Minister will decide on the relevant regulations within the framework of the amended State Gambling Agreement, which will come into force in 2021. However, it already seems clear that various forms of online gambling will be allowed.

Experts from the Hohenheim University also support this model of authorization. In a position paper, the university's gambling research center, for example, advocates the creation of a nationwide gambling authority. In addition, online casino games should also be legalized. But what changes does this really mean for players?

The revised state agreement provides for security but also restrictions

For online players, these changes will bring more clarity and security. After all, casino licenses will be issued by the German authorities and will be bound by clear rules. In addition, the authority will also be responsible for monitoring online gambling in Germany. This would give German players a home contact if they have difficulties with a casino.

Only poker players may have to compromise. Finally, experts from the University of Hohenheim also criticize the legalization of online poker. It is noted that it is particularly difficult to control the conditions of fair play in this area.  

Overall, the unified German regulation of online gambling should be a welcome innovation for players in this country. Restrictions should be expected, for example, in the field of online poker. Overall, nationwide regulation will provide more clarity and security for players.