Online Gambling in Germany

Despite poker taking its name from a German word-pochen-meaning to brag/bluff, you may struggle to play online poker in the country famous for its bratwurst. While there have been recent changes to Germany’s rather restrictive internet gambling laws, the country’s federal government has gone up against the might of the EU to keep a firm hold on its established gambling regulations. This is all in spite of the fact that real-world gambling and sports betting in Germany is completely legal, with these lucrative markets being a particularly fruitful source of tax income for the government.

The Legal Landscape

Internet casinos and online sports bookmakers were effectively banned in Germany under the Interstate Treaty on Gambling (ITG) that came into effect on 1st January 2008. Horse racing is the sole exception to the treaty, and those events fall under the purview of operators that are supported by the state. According to the treaty, Germany's government was given the power to ask internet providers to deny players from accessing to these site, and even to prevent German banks from sanctioning transactions with gambling firms.

A number of betting companies, as well as governing bodies such as the European Gaming and Betting Association, maintained that the treaty was in violation of European Union rules. The courts were in agreement with them, with the European Court of Justice ruling that the German government would be required to open up what it saw as a state monopoly of the country’s internet gambling industry. The country amended the treaty in 2012 as a result, making provisions for a maximum of 20 national licences for sports wagering to be awarded (although bookmakers would have to pay a 5% tax on every wager placed). However, while over 100 submissions have been tendered vying for one of these 20 golden tickets, the cutoff date for a government decision has continually been extended, and as yet none have been granted.

Recently, an odd quirk in the law has offered online gambling a legal way into the German market. In January 2012, Schleswig-Holstein, the farthest north of the country’s 16 states, decided to create its own, rather more liberal gambling laws, which saw the maverick state issue around 50 licences to online sports bookmakers, online poker rooms, and internet casinos including Betfair and Bet365. The bold move not only brought praise from the EU and online gamblers, but the International Masters of Gaming Law granted their coveted European Gaming Regulator of the Year award to Guido Schluetz, the senior government official for Gambling Regulation and Supervision in Schleswig-Holstein.

This Mecca of online gambling in Germany was short-lived though, with Schleswig-Holstein joining the treaty in early 2013. However, the government could not repeal the 50 or so licences already issued by the rogue state, leaving a slight fuzzy place in the online industry. While these licensees could now potentially face legal action, it’s expected that officials will allow the licences to play out their six-year duration (until 2018) rather than take the operators through legal proceedings.

That said, the German government is certainly no stranger to legal action regarding its gambling monopoly. B-Win Interactive, the Austrian company behind Party Poker, twice unsuccessfully sued the German state, but appealed the case in the German Supreme Court, arguing that the country must respect existing EU laws. The Supreme Court eventually ruled in favour of the company.

Popular Markets

Though online casinos in Germany are, therefore, somewhat of a grey area, they remain very popular with German gamblers, with the country’s online gaming industry 2009 values said to be around €10billion. Punters looking to avoid the confusion brought about by online legislation can play all their favourite card, table and slot games at one of Germany’s many government-operated real-world casinos (such as the Spielbank Berlin) or in the numerous commercial slot arcades on German high streets. Slot machines are said to be responsible for a large portion of Germany’s €50billion gambling revenues.

When it comes to internet gambling, sports wagering is more popular than poker or casino games (split roughly 50:30:20), with wagers on horse racing and the Bundesliga contributing heavily to the €5billion sports betting industry.

The Future of Gambling in Germany

The contradictory legal stances brought about by Schleswig-Holstein’s rogue year apart from the ITG has forced Germany to turn to the European Court of Justice to decide whether the rogue state’s licences can co-exist with the country’s otherwise tough stance on online gambling. Depending on the verdict, Germany may have to open up its gambling market in order to adhere to European competition and free movement of services laws. In the meantime, until the 20 national licences are granted, German gamblers are able to play poker and casino games or bet on sports online in their native language via a number of sites in possession of licences granted by Schleswig-Holstein until 2018.

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