GlüStV: Who oversees the sector?
Since the new State Treaty on Gambling (GlüStV 2021) came into effect in July, Germany has allowed reliable online casinos, online sports betting, and online poker. However, uncertainties regarding the regulation of the industry remain. The designated regulatory authority in Halle, Saxony-Anhalt, won't be fully operational until 2023. Until then, who will monitor the market?
The Federal States will Supervise until 2023
When GlüStV comes into force in 2021, a central regulatory authority in Halle, Saxony-Anhalt, is supposed to start issuing licenses and overseeing the market. But this authority is far from ready, and won't start its tasks until 2022. It's not scheduled to reach full capacity until 2023. Only around a dozen employees have been hired so far, despite plans for around 120 jobs at full strength. In the meantime, the rented building in Halle's downtown area has been signed to a lease contract.
As State Secretary of the Interior Anne Poggemann, who chairs the responsible administrative board, explains, the authority will at first concentrate on three areas: monitoring gambling market trends, gambling research, and promoting gambling research. In 2022, it will also focus on illegal internet-based gambling.
New regulations were imposed along with the GlüStV, applicable to German-licensed providers. These include a monthly stake limit of €1,000, a €1 minimum for each spin on online slot machines, a ban on live betting and table games, and the mandatory use of early-warning and blocking systems. Saxony-Anhalt states that licensees must also maintain a data backup system for the authorities to check quickly and effectively. Player accounts will be linked to a nationwide blocking list.
Aggressive Measures Planned
Poggemann announced that if the authority discovers rogue providers in 2022, there might be payment blocking, among other actions. If the authority is fully operational in 2023, it will issue nationwide licenses for online poker, online slot machines, and online sports betting. Monitoring of the blocking list will also be a responsibility.
The authority will utilize the list to check all deposits by players with providers. If any breaches are noticed, the providers must refuse the deposits. The authority will gain more power at this stage: they can block certain gambling products, providers, and advertisements. They'll also be allowed to prevent financial and credit service providers from facilitating payments related to gambling.
Saxony-Anhalt's Minister President Reiner Haseloff (CDU) mentioned that test purchases or test games may be conducted to fulfill the monitoring roles. If wrongdoings are found, there's a threat of harsh fines and, if necessary, license revocation. Any infractions will be conveyed to the law enforcement agencies.
Experts believe opening the market with few restrictions is crucial for successful channeling. Otherwise, customers might revert to EU-licensed markets. The objective is clear: tremendous growth opportunities, more jobs, and high tax revenues. A sports betting sector record turnover of over €9.3 billion in 2019 highlights the economic advantages.
The Betting Tax Risks Derailing Canalization
The wagering tax approved by the Federal Council a few weeks ago is sparking much debate: The EGBA (European Gaming and Betting Association) and the DOCV (German Online Casino Association) have strongly criticized it, and even the DVTM (German Association for Telecommunications and Media) is now questioning the model. The Finance Ministry anticipates raising over €1.3 billion in additional taxes.
However, the DVTM argues this model endangers the primary goal of the new GlüStV: to direct customers to the German market. That would jeopardize all subordinate consumer protection objectives of the new state treaty too, as nearly 50% of players might be forced back into the unregulated market.
This stems from the observation that German licensees must cut their payout ratios to maintain market standing. Normally, only gross gaming revenues, not the bets, are taxed on regulated European markets. A Goldmedia study supported the thesis: EU-licensed providers' offers would be more appealing.
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Source: www.onlinecasinosdeutschland.com
