Lower Saxony warns German banking firms to “terminate” online gambling payment partnerships
State regulator calls on banking industry to end existing relationships with illegal operators
German banks and payment providers have been warned they should no longer process payments for illegal online casino providers by Lower Saxony officials.
In a letter sent to five of Germany’s largest banking associations, the state’s ministry reminded banks of the existing online casino ban in Germany, asking them to ensure their members do not accept payments from these firms.
Lower Saxony’s Minister of the Interior and Sports Boris Pistorius outlined his expectation that the German financial sector would assume responsibility in preventing the processing of online gambling payments.
“I expressly point out that the payment providers fighting the illegal gambling market have an important responsibility and – independently by an official prohibition order – by law requiring payments to refrain from gambling,” said Pistorius.
“Existing business connections and the cooperation with companies that operate illegal gambling should be critically examined because of these offers and if necessary be terminated,” Pistorius added.
Targeted organisations include the German Savings Banks Association, the Association of German Banks and the The National Association of German Cooperative Banks.
Under current German law, online casino, together with lottery betting, is currently illegal and any payment providers are obliged not to process payments made by German players on illegal sites.
“The strategy of online gaming providers to ignore legal bans and official prohibitions to further maximise profits should no longer work,” Pistorius added.
In July, officials from Lower Saxony issued the first “cease and desist” letter, targeting global payments firm PayPal for allegedly facilitating online casino payment transactions.
PayPal was chosen in part because of its physical presence in Germany, including an operations site in Berlin and a technology campus in Dreilinden. The global payments heavyweight later switched off access to many gambling firms.
Seventeen other payment firms were also issued with warnings in the wake of the letter.
In November, Malta-headquartered operator LeoVegas said the Germany-wide switch-off of PayPal had cost the operator “20-30%” of its revenues from the market.
However, several operators including Interwetten, Tipico, bwin and bet-at-home have since reinstated PayPal among their payment methods, citing prior issued permissions to offer sports betting and accept associated payments.
German legislators recently agreed in principle to the passage of a new interstate treaty on gambling which would allow for the legalisation of online casino gambling for the first time from July 2021.
Picture Credit:istock/AndreasWeber