The German state of Schleswig-Holstein passed last week a bill that allows for its current online gambling regulatory regime to remain in place until mid-2021
The successful regulation of online gambling on the territory of Germany, one of Europe’s most lucrative markets, has proved quite the challenge over the past seven years. Country officials have tried to pass a federal legislation on the provision of online sports betting services on several occasions since 2012 when the original version of that legislation was introduced, but has failed every time.
The latest version of the Interstate Treaty on Gambling was introduced this year and was presented to the European Commission for a review earlier this month. An approval from EU authorities is one of the necessary steps before the law takes effect at a federal level.
The Schleswig-Holstein has been allowed to implement its own regulatory framework that will stay in effect until June 30, 2021. The framework’s extended validity was voted in favor of by the state’s Greens, Free Democratic Party, South Schleswig Voters’ Association, Christian Democratic Union party, and the Alternative for Germany party.
Germany’s Interstate Treaty on Gambling and Schleswig-Holstein’s Liberalized Regime
Despite previous criticism, the latest version of the Treaty only permits online sports betting and outlaws all other forms of online gambling, including casino games and poker. Unlike the proposed federal law, the legal framework of Schleswig-Holstein allows for the provision of sports betting as well as of online casino games and poker on the territory of the state.
Previous versions of the Treaty included a cap on the number of the sports betting licenses available. The first draft of the legislation only provided for 20 licenses to be granted to interested operators, while the second draft raised that cap to 40 licenses. After heavy criticism, the latest version of the proposed federal law had the cap removed.
If the European Commission backs the Treaty and Germany’s all 16 states adopt it, licensed sports betting operators will be taxed at 5% on turnover. In comparison, Schleswig-Holstein’s framework includes a 20% tax on gross gaming revenue.
Minister for Home Affairs Welcomes Schleswig-Holstein Liberalized Regime
The recent approval of the online gambling bill enables companies licensed in Schleswig-Holstein to extend their licenses until mid-2021. The latest developments were hailed by the state’s Minister for Home Affairs, Hans-Joachim Grote.
In a statement following the successful passage of the bill, Minister Grote said that it is their duty to protect residents of the state, particularly young people, from the risks associated with unregulated gambling. He went on to say that the newly approved regulations’ main goal is to ensure that gambling is provided “properly, fairly, responsibly, and transparently” and that none of these can be achieved if gaming and betting products are exclusively provided on the black market.
The Minister also pointed out that extensive negotiations continue with Germany’s other 15 states “with the aim of finding a common, viable solution for the entire gambling sector from 2021 onwards.” He noted that many have felt uncomfortable discussing the regulation of online gambling, but he believes that this is the only way Germany can combat illicit activities.
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