Germany has one of the most strict regulations on gambling but they are not completely against it. Citizens can still enjoy fun games in online casinos. However, online casino operators cannot build their headquarters in the country. All online casinos that German citizens may use are all offshore brands.
On 1 July 2021, Germany implemented the Interstate Treaty on Gambling 2021 (ISTG 2021). It was enforced to welcome a new era of legalization of online casino games and sports bookmakers in the country. Its most notable feature is the proposed player protection mechanism that all operators should give their German customers:
Player protection mechanism
A player protection mechanism comprises a set of features that the player can use on their account at will as well as additional rules for all German gamblers. On top of the €1000 monthly budget, users may only pay a maximum of €1 per wager. They must also wait for five seconds in between spins on slot machines to delay their gambling activity.
One of the features that all online casinos should give players from Germany is the panic button that can impose a self-ban on the website. This removes the user from accessing their account for 24 hours. Offshore online casinos cannot open their website for Germany if they do not wish to comply.
The taxation law is a bit worrying for operators. 5.3% of players’ stakes have to be charged as taxes from the operators. It is deducted every time a player pays the buy in for poker games instead of every wager. This is the most worrying element of the new rules that deterred many casino operators.
Operators may apply for a license in the new ISTG 2021 that is valid for five years. The regulation only identifies specific categories such as virtual slot games, sports betting, and online poker. An operator must classify their website under one of the specific categories and must identify each as individual instances for application if the website offers more than one.
The category ‘online casino games’, defined as virtual simulation of casino games, is not applicable for licensure. This rule means that the website cannot offer popular table games such as blackjack and roulette.
To apply for a license, the operator must adhere to the following conditions:
- An applicant must provide €5 million as a security deposit for each individual case. There can be multiple instances but the limit is €50 million.
- Online gambling offerings must be separated by category if there are more than one sharing the same domain. Accounts are also restricted from being opened on separate devices/browsers to prevent players from playing different games at the same time.
- Players must set a monthly deposit limit of €1000 across. This budget limit applies per player, not per provider. Meaning, players can only spend a total of €1000 per month even if they play on different websites.
- Providers must pay a fee to connect to and use the limit control data base of Germany.
- Players may only bet on outcomes of a game in sports betting. Live betting is still allowed but specific requirements will be imposed per operator.
- The operator must implement the player protection mechanism on all offerings if applicable.
It’s not a foolproof plan, however. The German government recognizes that the new rules are too strict for most operators and gamblers alike. They are aware that this will incite a rise in a blackmarket for online casino games so they are researching the prospect further.