Germany Goes Hard On Online Casinos

Published: 24/07/2020 | Last Updated: 09/10/2020

Reading Time: 3 Min

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Germany is taking a hard stance towards the regulation of online casinos in the country. Casino operators are now facing prosecution if they choose to neglect the new regulations the country wants to impose.

Nevertheless, the German government said that to avoid prosecution, online casino operators should just follow the new rules formulated under the new federal gambling treaty.

The German media company NDR reported on Thursday that the country has established a working group composed of representatives from different state law firms. The report added that the group is working on several recommendations with regards to a workaround on how online gambling operators can avoid enforcement actions from the government.

The newly enacted federal gambling treaty stands as Germany’s answer in order to curb the problem gambling in the country. However, the treaty appears to harshly punish the online casino and gambling industries. Nevertheless, the government is still keen in implement these new regulations despite the massive opposition from the gambling industry.

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New gambling framework

Earlier this year, all of Germany’s 16 states agreed to sign on the new federal gambling framework. Essentially, the framework will have total authority on all poker and online casino operations by July 1, 2021. Additionally, these products will be subjected to strict limits when it comes to stakes and deposits.

The new framework will also require bet makers to have different accounts for each gaming vertical. This means that online sportsbooks with an international license will be forced to cut ties with their customers until next year. While some online sportsbooks operators are complying with the new framework, a significant portion of the industry are not.

The German government said that those who will not comply with the new regulations will face harsh persecution. This will force companies to acquire new licenses and must provide evidence that they are complying with the new rules.

The rise of online casinos

The COVID-19 pandemic has caused governments around the world to close non-essential establishments. Among the most hardly hit are the casino and gambling industries. The lockdown forced people to look for alternative platforms and this is where online casinos come into the fray.

A recent study estimates that the online casino industry in Germany will generate €1.9 billion by 2024. This is a massive revenue stream for local governments to pass on. With the global economy stagnating, many countries are looking for alternative source of revenue stream and online casinos are among the most popular choice.

Despite the popularity of physical casinos and betting shops, many in Germany now prefers online platforms. Despite strict regulations, people are still flocking online casino platforms.

Since Germany is imposing strict regulations when it comes to online gambling, people are starting to use the services of gambling websites operating outside of the country. Online casinos operating outside of Germany are not prone to the new restrictions. This means that there are no deposit limits and players can place max bets on every game.

Germany, and Europe in general, is seriously considering the impact of online gambling. Many countries are now looking to regulate their own online gambling industries in a way that they can generate revenue without hurting their player base.