German regulations risk black market take-up says Lycka

Martin Lycka, GVC Holdings’ director of regulatory affairs, has called attention to the pending reorganisation of German gaming regulations, stating that ‘this is a gaming revolution built on sand’.

Writing for Politico, Lycka explained that ‘German gambling is on the brink of revolution’ with incoming legislation paving the way for the registration of an unlimited number of sports betting providers, online casino game providers, virtual slot machines and online poker games.

Since 2011, the online gambling sector has waited on the Bundestag (federal parliament) to rectify the final provisions of the Fourth Interstate Treaty on Gambling, allowing Germany to launch a federally approved framework regulating all gambling services.

Explaining that the new measures are the result of a treaty between federal states, he suggested that the new restrictions on products and advertising are ‘far from opening up the market’ and will create ‘a wholly unfulfilling gaming experience for customers’.

Lycka wrote: “Unfortunately, from the perspective of player protection, many of these requirements are neither effective nor necessary. What they achieve, instead, is the creation of a wholly unfulfilling gaming experience for customers, rendering the measures counterproductive to their stated aim of channeling players towards licensed and legal providers. Far from opening up the market, this is a gaming revolution built on sand.”

The measures included in the treaty include:

  • A ban of live streaming on betting sites.
  • No commercial advertising on radio and internet for virtual slot machines, online poker and casino games between 6am and 9pm.
  • A one-minute delay for customers when they switch between different games on the same internet domain, such as from sports betting to virtual slot machines.
  • A five-minute delay when switching between different gambling sites.
  • A €1 stake limit on virtual slot machines.
  • In-play sports betting limited to the final score and associated markets; however, this situation remains unclear.

The new measures pose the risk of driving players towards unregulated, black market sites which Lycka stated hold ‘zero responsibility, zero protection and zero tax being paid’.

In addition, the new German gambling treaty will record all player data ‘in a blanket matter without any pattern of problematic behavior necessarily existing’, which under the eyes of the German Federal Constitutional Court is a ‘particularly serious encroachment on fundamental rights’.

Lycka emphasised that an ‘appropriate’ level of monitoring is necessary, but pointed out that ‘the federal states fail to make the vital distinction between addicted and non-addicted players’.

He concluded: “In principle, the new German measures are an important step towards modern regulation of people’s digital lives. However, Germany has missed a massive opportunity to follow the likes of Denmark, Spain and Italy, which allow all products in a competitive open permit model and is in compliance with EU law.

“Efforts to criminalise and prohibit on the basis of the current legal situation, which is unlikely to comply with EU law, is misguided and counterproductive. In order to achieve the goal of the new state treaty — channelling players towards licensed and legal providers — German lawmakers must work with the European Commission to devise a safe, user-friendly and attractive gaming sector.”

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