Germany takes key step toward sports betting licence regime

German legislators have agreed an amendment to the Interstate Treaty on Gambling which would remove the limits on sports betting licences for the first time.

The amendment could see states and operators accept and implement the treaty for the first time and pave the way for a licenced sports betting regime across Germany.

The previous treaty was seen as incompatible with EU competition law due to a cap on the number of licences and therefore never implemented.

The new Interstate Treaty also includes provisions to extend the so-called experimental phase for sports betting until 30 June 2021. The possibility to extend that deadline further to 2024 is also included.

“The draft is a welcome development for sports betting operators that want to be licensed in Germany,” said Dr. Michael Stulz-Herrnstadt and Christoph Engelmann, lawyers at DLA Piper, in a blog post.

“With these amendments the German states want to provide clarity for sports betting operators and involved third parties, including payment service providers, the media and sports clubs. The gambling authority of Hesse is expected to start the licensing procedure as soon as possible in order to ensure issuing the licenses in January 2020.”

The amended treaty requires all sixteen regional authorities to actively prohibit unlicensed sports betting, with provisions that any licensed sports betting operator found to be offering unlicensed gambling could have their licence revoked.

All 16 state Prime Ministers are due to meet to discuss the treaty later this month, with a view to signing it into law before the end of the year. Adoption of the agreement is dependent on all 16 states signing.

Ranier Lauffs, chief operating officer at Veltyco Group believes adoption of the amended treaty will be “very hard to predict” as often in the past “one amendment seemed to be the one everybody agreed with before the meeting, and then something very different came out after the meeting”. Lauffs believes this situation will be no different as not all states currently agree with the amendments made.

At present the treaty is limited to sports betting and makes no mention of egaming. A separate amendment allowing the German state of Schleswig-Holstein to extend its licensing of online casinos currently under operation to 2021 is also under consideration.

For more information on the German market, read EGR Compliance’s market focus on Germany, available here.