Today the European Union, in terms of gambling legislation, is considered to be one of the most law-abiding regions. Both offline and online gambling is legalized there and is subject to the same rules developed for all of the EU members. Perhaps, the only exception to the rule is Germany. Its online gambling regulation causes multiple issues, both for the leaders of the European Union and gamblers themselves. Let us have a closer look at features of German gambling legislation and analyze some of the amendments to be introduced in the near future.
Current Gambling Legislation
Germany is divided into 16 federal states called "lands". By analogy with the United States, there are different regulations on gambling in every separate state. And, despite of the fact that German gambling is completely legalized, there haven´t been shaped any legislative framework in order to control the said industry.
With land-based casinos all is more or less clear: there is a licensing system, and every state has its own rules and restrictions according to the age of players, the time of gambling, etc. That means: in some federal states you are allowed to play from the age of 18 (for example, in Berlin) while in others - only from the age of 21 (for example, in Baden-Baden). In Germany taxes for gambling establishments are high and in total exceed 80% of income.
With regard to the online gambling houses, most of Germany's states have not yet passed laws allowing them to work legally - both own and foreign ones. The only legal form of gambling allowed by law is betting on horse races. But this business is almost completely monopolized by the country, giving no opportunity to foreign betting companies to enter the German market.
All these facts have provoked claims and matters for further disputes at the EU Council, since the current German laws do not comply with the requirements of EU legal acts and do not allow the foreign operators to work freely on the German market.
Consequences of Legislative Restrictions
What are the consequences of such legislative features? There is an underdevelopment of the industry: the authorities enable the active development of domestic operators and are not able to streamline the activities of foreign online casinos. All of that resulted in development of the shadow market and growth offshore companies.
In addition, in recent years, several major European operators have been forced to leave the German online market. In 2015 the five largest poker sites suspended their activities after one of the players was prosecuted. As a result, such portals as Slots Heaven, Mansion Casino, Casino.com, Les A Casino, Club777 Casino and Playtech do not accept any real money bets from Germans.
Theoretically, German players have the opportunity to play at foreign online casinos, accepting monetary bets in both US dollars and euros. But in recent years, the German authorities have tightened control policies and started prosecuting citizens for online gambling. In accordance with §285 of the German Penal Code, the players commit a criminal offense facing a fine of up to 180 days' wage or up to six months in prison.
This is the main reason why German budget is currently losing a lot of money that could fill the State Treasury. According to data for 2015, experts recorded a significant revenue decline from the local gambling.
Upcoming Legislative Changes
Thus, there are two decrees, being already adjudged by the German Federal Administrative Court and the European Court of Justice. They contain a direct requirement to the German authorities to bring gambling laws into compliance with the EU requirements regarding the organization and control over online gambling. Based on this, certain legal amendments were established in Germany.
But on some points of the new bill, experts and market participants still raise a number of questions. The amendments to the details of licensing gambling operators, whose activities apply to sports betting, are more or less clear and acceptable to all parties, while the online casino operation is completely ignored as before. In other words: online casinos will not be legally authorized, that means, they will be banned.
Therefore, experts turn on this document, and till now it is the subject of fierce disputes both in the media and in the German State Treaty on Gambling. This means the draft law, which will come into effect, can still be amended in accordance with a number of legal procedures until January 2018.