GVC regulatory chief: “Counterproductive” German regulation will fuel black market
Martin Lycka calls on legislators to avoid “wholly unfulfilling” gambling experience for consumers under new interstate treaty proposals
Germany’s amended interstate treaty on gambling will strengthen the country’s black market and changes to its “counterproductive” legislation are needed, according to GVC head of regulatory affairs Martin Lycka.
In an op-ed published on the GVC website, Lycka claims many of the player protection requirements imposed as part of the new interstate treaty (IST) are “neither effective nor necessary” and will not address identified issues.
“What they achieve, instead, is the creation of a wholly unfulfilling gaming experience for customers, rendering the measures counterproductive to their stated aim of channelling players towards licensed and legal providers,” said Lycka.
“Far from opening up the market, this is a gaming revolution built on sand,” the GVC regulatory chief added.
Restrictions included within the new IST include a ban on live streaming via betting sites, restrictions on advertising, mandatory delays when switching between different operator verticals and a €1 stake limit on virtual slot machines.
By imposing these restrictions, Lycka insists German-licensed operators will have less attractive and less competitive products than unlicensed counterparts, resulting in more customers moving to the black market.
GVC director of regulatory affairs Martin Lycka
GVC also highlighted “hardliners” among German state authorities committed to imposing restrictions on international operators and payment service providers – the most recent example of which being Lower Saxony.
In February, Lower Saxony warned the German Savings Banks Association, the Association of German Banks and the National Association of German Cooperative Banks to cease processing payments for online casino operators.
GVC entered a dispute with authorities in Hamburg over the alleged illegal offering of online casino gaming to German players, a claim which is currently being settled in court.
Addressing the issue of differing regulatory standards across Germany’s 16 states, Lycka claimed regional inconsistencies are “inevitable” for online casino table games in the new regulated environment, with states imposing their own limits on an arbitrary basis.
“Given the limited number of concessions that may be permissible, monopolies or oligopolies will likely form. Clearly, this means an unlevel playing field and is, therefore, highly questionable under EU law,” Lycka explained.
“This also contrasts with the legislation’s provisions for virtual slot machines, online poker and online sports betting, which can be offered nationwide in an open permit model,” he added.
The amended IST on gambling is currently being scrutinised by the European Commission, which can force its redrawing, if supranational European Union treaty obligations are not met in areas including the freedom to move goods and services across borders without restriction.
Indeed, in his own assessment of the passage of the treaty, Lycka cites previous failures to pass legislative gambling changes in both 2016 and 2017.
“The new gaming regulation, which will see state monopolies in individual German federal states competing against concession models with approved private providers in other states, will probably give rise to concerns about its lack of consistency, a key ECJ requirement of national laws.
“As such, the new regulation runs the risk of being diagnosed as incompatible with EU law and thus partly inapplicable,” he concluded.
Germany’s revised gambling market, which will see regulated online casino operations launch for the first time, is scheduled to go live in July 2021.