Wirecard's influence in the online gambling industry
In recent times, Wirecard, a financially unstable payment service provider, has been hitting headlines due to its proposed involvement in the German gaming industry. This controversy was ignited by a revelation from the business newspaper, Capital, which disclosed Wirecard's plan to become the major payment processor in the upcoming online gambling market in Germany.
Wirecard aimed to secure a lucrative and shady position in this future regulated gaming market. According to Capital, the company had been actively lobbying with the state chancellories of the federal states, with some states reportedly being receptive to its proposals. The plan was to become a payment authority for gambling transactions.
The idea for this contract emerged during the talks on the regulation of German online gambling, where Wirecard was providing advice to the states. Permission for this arrangement was discussed among the states.
Had this idea been approved, Wirecard would have obtained a billion-dollar deal. This, despite the company's tainted image consisting of numerous allegations of involvement in transactions related to pornography and gambling before the disclosure of its massive balance sheet scandal. The company fell apart once it was discovered that the supposed 1.9 billion euro financial shortage was fictitious.
A former manager, Burkhard Ley, who was the special representative of the Wirecard board of directors, was responsible for the extensive lobbying. Ley, who had been the finance director for years, is currently incarcerated. Ley allegedly received aid in his dealings with the German online gaming sector from the Media Association DVTM and the consultancy firm of former Hamburg mayor Ole von Beust.
Capital also spoke with the Rhineland-Palatinate State Chancellery, which verified that Ley had met with State Chancellor Clemens Hoch twice - once in February 2017 and again in October 2018. Both meetings revolved around the German gambling novella.
During these discussions, representatives from the gaming industry were also present. Capital gained access to the attendee list at this point, where various topics were discussed, including control mechanisms for gambling-related transactions. A financial concept was also proposed, which entailed state authorities supplying funds to companies like Wirecard during specific periods of time.
Wirecard allegedly pushed for its objectives over several months. The company knew that it was crucial for states to direct the transactions within controlled channels amid liberalization. Many of the providers currently operate from Malta or Gibraltar. The states have decided to establish a new gambling authority to monitor the payment flows.
Nevertheless, several questions remain unanswered. It is no surprise that certain federal states are hesitant regarding the Wirecard model. A native German company acting as a central control point would also bring advantages in terms of data transfer. The Rhineland-Palatinate state government expressed interest in this model as it could speed up or possibly eliminate the need for creating its own control programs.
The appeal of this major contract for Wirecard is clear, given the continued growth and billions in revenue generated in the online gaming sector. Estimated gross winnings amount to approximately four billion euros. Profits from mutual transactions between players and operators could be even higher.
The positive development is particularly striking in the record amounts for sports betting. This reached 9.3 billion euros in 2019, a 21% increase. The state gained tax revenues of around 500 million euros. The Wirecard scandal demonstrates the need for a uniform regulation to facilitate better control measures and provide numerous benefits to the economy.
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Source: www.onlinecasinosdeutschland.com
