Offline Gambler System V 7 0
Myong Killings
For the first time, operators may apply for a licence to offer virtual slot machine games. Since 1 January 2023, the new Joint Gambling Authority of the federal states has been responsible for the regulation and monitoring of virtual slot machine games.
Bricks-and-mortar casinos are regulated under state laws, not federal law, and the Ministry/Senate of the Interior of the respective state will, in general, be the authority responsible for licensing and supervision.
The Interstate Treaty 2021 also introduces a licencing system for online poker. Since 1 January 2023, operators have been able to apply for a licence for online poker with the Joint Gambling Authority, based in Saxony-Anhalt. Before that date, the State Administration Office of Saxony-Anhalt was responsible for licensing of such games alongside virtual slot machine games.
Poker is permitted, in most of the German states, in state-owned casinos and regulated by the Ministry/Senate of the Interior of the respective state. In Saxony and Baden-Wuerttemberg, poker is not expressly mentioned, but will be approved when presenting an adequate gaming concept when applying for a licence, and is therefore not excluded.
The Interstate Treaty provides for sports betting licensing. Other forms of betting (with the exception of horse race betting; see below), in particular social/financial betting or betting on virtual sports, are not permissible. At the time of writing, regulators had not concluded whether betting on e-sports can be considered betting on sports. Since 1 January 2023, the new Joint Gambling Authority in Saxony-Anhalt has been responsible for sports/horse race betting licences. Up until then, the responsibility lay with the Regional Council in Darmstadt, Hesse.
The classification of fantasy betting as game of skill or game of chance depends on the specific circumstances and the mechanics of the game in question. There is no specific authority responsible for fantasy betting matters.
The same applies to brokers of state lottery products, which can be privately owned entities, unless they operate in multiple German states, where the gambling regulator of Rhineland-Palatinate is the authority responsible for nationwide licensing and supervision. Since 2023, the new Joint Gambling Authority in Saxony-Anhalt has been responsible for licensing across Germany.
Games of chance are defined as games where payment of consideration is required in order to acquire a chance to win and the determination of winnings is entirely or predominantly a matter of chance. Any gambling activity falling within this definition is subject to specific gambling legislation.
Casino gambling (bricks-and-mortar) is considered a matter of state law, not federal law, and is primarily regulated by the various Casino Acts and the Gaming/Casino Ordinances of the states. The Casino Acts usually distinguish between table games (e.g. roulette and card games) and slot machine gaming. Although subject to controversy, the majority of German courts have so far regarded poker as a game of chance and not a game of skill. Therefore, offline poker is only permitted in state-owned casinos.
Online casino gambling: While the Interstate Treaty provides for a licensing system for virtual slot machine games, it remains to be seen whether the federal states (on a per state basis) will issue licences for online casino games (i.e. particularly roulette, blackjack, baccarat) to private operators or will pursue a state monopoly. At the time of writing, some federal states have opened the market to private operators, such as Schleswig-Holstein and North Rhine-Westphalia. They have created the legal basis for this. In Schleswig-Holstein, a call for tenders has already taken place in 2022. North Rhine-Westphalia is planning a call for tenders in spring/summer 2023. The majority of the other federal states either have no regulations at all on online casinos or only allow state-run offerings. Hesse, for example, has given the city of Bad Homburg the possibility to obtain a licence in sec. 3 (2) Hessisches Spielbankgesetz. Thuringia has also stipulated in the Thuringian Gaming and Online Casinos Act that only the state may be granted a licence (sec. 2 (2)).
Horse race betting: For traditional reasons, betting on horse races is regulated under federal law. The Race Betting and Lottery Act regulates organisation of betting on horse racing and taxation rules for lotteries, sports betting, virtual slot games and online poker in general. The Interstate Treaty partly applies to horse race betting, including general licensing and player protection requirements. Land-based betting on horse racing can be offered by the horse racing associations on race tracks or by bookmakers in retail betting shops.
Lottery including bingo: Only state lottery companies may apply for operating licences. Private operators may only apply for distribution (brokering) licences, allowing them to sell lottery tickets on behalf of the state lottery companies to promote the products offered by the state lottery companies.
Social/skill games: If understood as free-to-play games, they generally do not fall under the definition of games of chance and hence lack specific regulation. They may be operated without a licence, yet restrictions may apply resulting from general consumer or minor protection laws.
Similarly, games will not be subject to gambling regulation if they qualify as a skill game, which is often the case in relation to e-gaming/e-sports offerings, but the character of the game will always have to be assessed on a case-by-case basis.
It will depend on the gambling product as to whether licences are available, and which licences or other permits are required or can be applied for, for the lawful offer of the relevant products to persons located in Germany. By product, the following licences are currently available to private operators:
Casino gaming (including poker): Licence for the operation of land-based casinos (although the majority of casinos are state-operated). Licences for operating online casino games may become available as soon as states implement tendering procedures or local monopolies for these games. The timing of future licensing opportunities is not clear yet. At the time of writing, Schleswig-Holstein and North Rhine-Westphalia have made use of the option of opening the market to private operators as well. The majority of the other federal states either have no regulations at all on online casinos or only allow state-run offerings. Hesse, for example, has given the city of Bad Homburg the possibility to obtain a licence in sec. 3 (2) Hessisches Spielbankgesetz. Thuringia has also stipulated in the Thuringian Gaming and Online Casinos Act that only the state may be granted a licence (sec. 2 (2)). Online operators can further apply in Saxony-Anhalt for licences for operating virtual slot games and online poker. The German gambling regulations do not provide for B2B licensing and, accordingly, there is no obligation on suppliers/developers to apply for such licences. Any virtual slot machine game needs to be approved by the authority and tested by a test lab accepted by the regulator. The individual licences are to be obtained from the operator, not from the developer of the games.
Sports betting: Licence for the operation and brokerage of online sports betting across Germany, and for land-based sports betting in betting shops. Sports betting licences have been issued since November 2020.
Lotteries: Licence for the brokerage of traditional state lottery products (land-based and online); licence for the operation of charitable lotteries that have their draw results published no more than twice a week, have a top prize worth less than EUR 3 million and do not have a scheduled jackpot. The operation of traditional lottery products, such as the national lottery or other large-scale lotteries, as well as pool betting, is subject to the state monopoly. Private operators may not apply for such licences. They may only apply for a licence allowing brokerage of the state lottery products. Operating secondary lotteries is seen as illegal betting activity by German regulators and it is an enforcement priority for regulators.
There is no uniform structure for all licensing regimes in Germany. In terms of the application requirements, the licensing proceedings under the Interstate Treaty, including sports betting and virtual slot machines, generally follow the requirements set out at question 2.3 below. The licensure of sports betting and virtual slot machines as well as online poker games essentially consists of only two stages, i.e. the application stage, where the regulator expects a written request to be issued with a licence and complete submission of application documents, and a post-licensing stage, where the licence is to be implemented according to an implementation plan to be approved by the regulator. In the area of virtual slot machine games, online poker games and sports betting, in addition to the operator/broker licence, a licence must be applied for each individual game/bet type offered.
Licences for the operation of land-based casinos, issued under the Casino Acts of the different states, usually have a licence term of about 10 years, with an option to extend the term for a further five years. Licences issued under the Gaming Act of Schleswig-Holstein lasted for six years but were effectively extended by means of a transitional regulation, which could extend Schleswig-Holstein online casino licences until 31 December 2024. However, in any case, these licences terminate upon the granting of a new licence under the provisions of the Interstate Treaty 2021. Sports betting licences issued under the former Interstate Treaty, originally valid until 30 June 2021, were automatically extended under the Interstate Treaty 2021 until the end of 2022 if they were valid on 30 June 2021 and the licensees complied with the changed requirements under the Interstate Treaty 2021. These were renewable for a further five years on request in 2022. Sports betting, virtual slot machine and online poker licences under the Interstate Treaty 2021 have an initial licence term of five years. Subsequent licences shall have a licence term of seven years.
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