Around half of Germany’s casinos are state-owned while the other half are run by private enterprises.
Online casino games are currently prohibited, however state prime ministers have approved a new interstate treaty which would licence online casino gaming from Summer 2021.
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Under the terms of the that treaty, licenses for internet table games would be limited to exactly the number of land-based licenses available in each state. Authorisations for online virtual slots will be available in an unlimited number on a nationwide basis.
Although Germany carries some of the highest gaming tax burdens in Europe, it is still the fourth highest earner in terms of revenue in the continent.
Despite this high rate, In December 2019 the European Commission opened an investigation into whether public casino operators had received state aid due to their special tax status.
The inquiry is ongoing, but in a worse case scenario German states would need recover the state aid they have already paid out.
However, similar cases brought against North Rhine-Westphalia over its concession procedures were thrown out by the Commission in 2019.
Another ongoing EU investigation is looking into whether North Rhine-Westphalia’s annual loss compensation payments and capital injection in 2015 granted in favour of WestSpiel, the state-owned casino operator, gave the company an unfair advantage over its competitors in the region.
In recent years German casinos have also had to wrestle with smoking bans, restrictions on advertising, more stringent ID verification processes and the denial of ATM cash access for players, along with new identification requirements to combat money laundering.
Existing German gambling laws were written with the intention of granting a state monopoly over a few limited forms of online gambling, but have in reality had nearly the opposite effect. The laws were poorly written, found to be in violation of EU free trade agreements and have been mostly ignored by the international community at large.
The only impact the laws have had is to make it impossible for any truly German casino sites to be established on home territory. Instead, online casinos headquartered in other EU nations dominate the internet gambling market in Germany today.
What this means for German gamblers is that you can play online wherever you wish without fear of legal penalties. For all intents and purposes, online casinos are alive and well in Germany.
The largest and most-well known German casino sites today are:
Authorities have also attempted to implement both payment blocking and internet blocking of online casinos in Germany, but those efforts have likewise failed. Internet service providers resisted the effort on the grounds that they were not responsible for the content of independent websites and later court rulings affirmed that to be the case.
The efforts to block payments to online gambling sites also failed for numerous reasons relating to data retention laws, the difficulty in identifying “illegal” transactions and privacy laws. Germany’s efforts to enforce a state-run monopoly over gambling have failed in all key areas and the market remains relatively open for players to this day.
Depositing to and withdrawing from German online casinos remains a simple process to this day. Gambling websites accept all the most popular payment methods in Germany such as credit cards, Neteller, Skrill, Sofortüberweisung, Giropay, PayPal, Entropay, iDebit and Paysafecard.
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As one would expect, online casinos located in other EU member states argue they are not obliged to block access to German players. They base that argument on several factors including the fact that German law does not extend to their home countries and that the law violates EU treaties. Recent EU court rulings against Germany have further emboldened operators in other countries to openly target German customers.
History of German Gambling Laws
Germany first took up the issue of online gambling with discussions beginning in 2006 that ultimately resulted in a bill called the Interstate Treaty on Gambling being passed in 2008. This bill sought to ban all online gambling across Germany except for horse racing betting and restricting all other forms of gambling to state-run operators.
The European Commission immediately criticized the bill as it gave the German state a monopoly over online gambling. The only operators allowed to offer gambling at all were state-run operators, and they did have the option to offer online wagering. Long story short, EU law permits nations to ban any activity, but not to set up monopolies or favour domestic companies over international companies. You either ban it for everyone or leave the market open to competition.
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Several years and European Commission court rulings later, Germany amended the Interstate Treat on Gambling to bring it into compliance with EU law. The 2012 amendment called for up to 20 licenses to be issued to private online sports betting operators. However, the government delayed the licensing process and failed to issue a single online gambling license.
Meanwhile, the state of Schleswig-Holstein had been the only state to opt out of the 2012 amendment. Schleswig-Holstein passed its own gambling act that called for the issuance of up to 50 licenses for online casinos, poker and sports betting. Seven six-year licenses were issued in 2012.
Just one year later, the new Schleswig-Holstein government came into power and abolished the state treaty to bring the state in line with the federal government and the national Interstate Treaty on Gambling. The state government decided it would be too costly and controversial to revoke the state licenses that had already been issued to seven operators, so they left those alone. Seven online gambling sites are still legally able to accept wagers from residents of the state. Those licenses expired at the end of 2018.
The German government has made other attempts to block payments to foreign online casinos and those attempts have also been unsuccessful. Over the years, multiple EU court rulings have reiterated their belief that German gambling laws are in violation of EU agreements.
In fact, a 2016 domestic criminal case involving a woman who operated a sports betting terminal in Bavaria blew up in Germany’s face when the matter was referred to the Court of Justice of the European Union (CJEU).
In that case, a woman living in Germany ran a betting terminal that helped process bets with an Australian sports betting operator even though she had no authorisation to do so. She was charged by prosecutors under German gambling laws, but the local court had serious doubts as to whether this case was even prosecutable given the long-running clash between German and EU law.
The local court referred the case to the CJEU and the final ruling was the worst possible outcome for German efforts to control online gambling. The ruling resulted in German authorities losing what remaining powers they had to act against privately owned gambling websites that are licensed in other EU nations.
The Secretary General of the European Gaming & Betting Association said that the ruling “emphatically confirmed that the German online betting regime reached a practical and legal dead end.”
Change will come to Germany sooner or later. And even if it doesn’t, that’s just as well for players, too. Online casinos licensed in other countries have free reign to accept wagers from Germans.