In 2024, the distinction between lawful and unlawful betting in Germany: Exploring the permitted and prohibited activities
Evolution of Legal and Illegal Gambling in Germany's Landscape
The distinction between legal and illegal gambling in Germany has witnessed significant transformations over the years. This has been particularly evident since the implementation of the Gambling State Treaty 2021. Therefore, this article aims to provide an update on the current situation in 2024 and shed light on the legal and illegal forms of gambling prevalent in Germany.
Understanding Gambling in Germany
Gambling in Germany has a rich history. Over time, certain forms of gambling have gained popularity while others have declined in significance.
The German law, as outlined in § 3 GluStV 2021, defines a "gambling game" as an activity that involves charging a fee for the chance of winning, with the outcome mainly depending on chance.
In the contemporary German landscape, the following types of gambling are prevalent:
- Lotteries and scratch cards
- Slot machines
- Sports betting
- Table games (including Blackjack and Roulette)
- Other gambling games (such as raffles)
These gambling activities are available both in physical establishments and online. However, not all of these offerings are legal, as we will further explore.
The definition of gambling can also evolve over time. Presently, there is a heated debate regarding whether digital items obtained in video games, known as "loot boxes," should be classified as gambling. A decision on this matter is still pending in Germany.
In the subsequent sections, we delve into the essential details about illegal and legal gambling related to lotteries and scratch cards, slot machines, sports betting, and table games like Blackjack and poker.
Lotteries and Scratch Cards
The lottery sector is monopolistically managed by the German state. The conduct of lottery games or the sale of scratch cards is prohibited for private companies independently. Nonetheless, various online providers market lottery offers despite these regulations. Are such offerings illegal?
Mediation vs. Secondary Lotteries
Legally, it is permissible to mediate players' participation in permitted lottery offerings in Germany. Without such mediation, fewer players could engage in lotteries, and the state would struggle to operate as many acceptance points. Consequently, entrepreneurs receive commissions for mediating players.
However, determining whether online lottery offers are legal or illegal can be more challenging for players. Legal online providers with appropriate licenses can also mediate authorized lotteries.
On the other hand, secondary lotteries involve players betting on the result of an actual lottery with an independent provider. This can lead to irregular prize distributions and uncertainties regarding the enforceability of large winnings because it is unclear whom these secondary lottery providers bet against or if the prize pool is only played among secondary lottery participants.
Lottoland has faced criticism in the past. However, Lottoland has recently obtained a license to mediate lottery offers, indicating its adaptation to local laws in Germany.
Wariness Towards Lotteries from Abroad
The Spanish Christmas lottery, El Gordo, attracts German players due to its high winning probabilities. Given that tickets can only be purchased in Spain, German players are generally barred from participating.
Internet providers claiming to offer El Gordo gameplay are not official intermediaries. Instead, they operate secondary lotteries. While such providers may indeed purchase genuine tickets, players have no legal entitlement to winnings if the secondary lottery provider happens to go bankrupt.
Slot Machines
In Germany, slot machines, also known as slots, can be installed in physical locations and offered online. Originally mechanical, these machines are now typically digitalized and software-driven.
For all forms of gambling, operators require a license to provide commercial gaming services. The Joint Gambling Authority of the States (GGL) issues online licenses, while stationary licenses are issued by the states.
Many online gaming halls advertise with licenses from other EU countries or gambling licenses from microstates. Although these providers and license issuers rely on specific legal loopholes, only the German GGL license is valid for legal online gambling in Germany.
Identifying Illicit Slot Machines
Numerous illegally operating slot machine providers exist both online and offline. Recognizing them is straightforward, particularly if they ignore the regulations outlined in the State Treaty on Gambling.
For example, the absence of age verification or OASIS and LUGAS status checks before playing on a stationary slot machine signifies an illegally operated device. The State Treaty on Gambling is implemented to protect young players and offer mechanisms for self-exclusion and restrictions on excessive deposits across providers.
In the online sector, telltale signs may indicate whether you're engaging with a legal or illegal provider:
- The absence of a self-exclusion feature
- Bets exceeding 1 Euro per spin
- Slot machines offering a progressive jackpot
- Non-observance of the mandatory 5-second pause between spins
- Permitting bets with cryptocurrencies or other virtual currencies
- Live casino games are offered
Play Responsibly on Legal Slots
The resounding recommendation for all players is to play only on legal slot machines. In Germany, each slot undergoes individual licensing by the GGL, ensuring fair gaming conditions.
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Virtual Gaming Halls Regulations
operators or providers of virtual gaming halls must fulfill several requirements to obtain a license to operate slot machines. Online, the GGL badge serves as a sign that the provider holds a German license. For added safety, examining the website's imprint and comparing it to the GGL white list is recommended.
Legal Status of Sports Bets
In Germany, both bets placed in betting shops and online bets, or at the racetrack, are fundamentally legal. However, unlawful providers exist in the market as well.
Arguments about Sports Bets and Gambling
Over time, it was a contentious issue whether sports bets should be viewed as gambling or if players could offset the house edge using their skills. In Austria, sports bets are still considered to be a game of skill. Consequently, they are managed differently from other gambling activities.
In Switzerland, sports bets are classified as money games rather than gambling. Nevertheless, the new Swiss Money Gaming Act unites both categories and treats them with the same strict regulations, making this distinction irrelevant.
In Germany, there is no doubt that sports bets fall under the category of gambling, thus necessitating suitable regulations and compliance from providers.
Detecting Illegal Sports Betting Providers
Similar to slot machines, the same criteria are applied to assess the credibility of sports betting offers. The first step is to verify the provider's license. Betting can be conducted with confidence if the license is validated.
Some bookmakers boast that they operate tax-free or return the betting tax to customers. However, it's essential to scrutinize the billing method in such situations. According to the State Treaty on Gaming, a 5.3% tax levy on internet providers' online bets is mandatory. The bookmaker must pay this tax without exception.
In most cases, the promise of tax waivers by bookmakers for customers is merely a marketing tactic. This may be offset by less favorable odds. If a player feels that a bookmaker avoids paying taxes, they should avoid dealing with that provider.
An indication of illegal sports betting provides is the offer of virtual sports bets. Despite the growing popularity of eSports, sports betting in this area is not yet permitted in Germany. Additionally, politics bets or bets on events are prohibited.
Classic Table Games in Casinos
For centuries, classic table games in casinos have been a source of excitement. The roulette wheel spins in casinos across the globe – from Baden-Baden to Las Vegas. Table games like baccarat, blackjack, and poker are also popular.
Limited Availability of Table Games on the Internet
In Germany, table games are a privilege exclusive to land-based casinos. This is why online gaming halls can no longer call themselves online casinos, although they are often referred to as such.
While gaming halls mainly cater to slot machine games (also known as "the little game" in German), casinos can offer "the big game" at the tables, provided they comply with the law. There are numerous land-based casinos in Germany where this is possible.
Despite the prohibitions, ample opportunities exist on the internet to play Blackjack, Roulette & Co. online. Sometimes, these games are even offered as live casino versions with a real croupier streamed to the players.
While some experts have advocated for regulating the table games sector on the internet to combat the black market, these games remain prohibited in the virtual sphere at present.
The sole table game that can be offered on the internet is poker. However, obtaining a separate license is required for providers, which means that slots, sports betting, and poker cannot be made available on the same platform. Instead, a separate licensing process must be undertaken for each offer, and the games must be accessible on separate websites.
The reason why poker is permitted on the internet is that players can compete against one another and not solely against the bank. Experts believe that the gambling aspect is reduced to some extent by the skills of the players. This also explains why poker professionals are subject to income tax.
Summary: Players must remain cautious
In conclusion, it can be said that the landscape of legal and illegal gambling in Germany is well-regulated. However, players may sometimes experience uncertainties due to the multitude of gambling activities.
Players should be informed about the applicable rules and carefully evaluate every provider. After all, real money is used for these activities.
In the realm of online gambling in Germany, online casinos are a popular choice, with platforms offering slot machines, sports betting, table games, and other gambling options. However, not all these offerings are legal, as some providers may operate without the required German GGL license or exploit loopholes by obtaining licenses from other countries or microstates.
When it comes to gambling activities like lotteries and scratch cards, the legal landscape is more complex. While lotteries are predominantly managed by the German state, certain online providers still offer unauthorized lottery games. Players should be wary of secondary lotteries, which can lead to irregular prize distributions and uncertainties regarding the enforceability of large winnings, as it is unclear whom these secondary lottery providers bet against or if the prize pool is only played among secondary lottery participants.
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