Germany Agrees to Implement Transitional Period for Online Casino Operators

German states had been preparing for a change in legislation governing local online casinos and virtual sports betting operators for a while now. According to the draft that is currently circulating among the 16 German states, the operators have time to continue serving the lucrative German market till July 2021, provided they abide by a range of strict guidelines.

The proposal, which was recently accepted by state representatives, covers the period between October 15, 2020, and July 1, 2021, following which the Interstate Treaty (IT) will come into effect. This is a huge relief for the operators, some of whom feared their businesses would shut down till the new legislation came into effect. Similar to the cooling-down period observed by their counterparts in the nearby Netherlands.

What the Interim Laws Mean for Online Sportsbooks and Casinos?

The authorities in an official statement confirmed that operators would not be penalized as long as they abide by the rules laid down. The interim laws are currently being processed by the European Union. If passed, the new legislation will introduce a new tax structure on online gambling apart from appointing a state-wide regulator, quite possibly based in Saxony-Anhalt, Germany’s 11th largest state by population and 8th largest in terms of area.

German operators have until October 15 to comply with the interim laws, following which no new permits will be granted. Plus, the operators could also have their licenses revoked when the new rules apply in July. While most major operators are expected to comply, the new laws significantly reduce revenue streams.

This was a major point of conflict between online casinos and state authorities, which led to numerous discussions and debates in the past. While some federal states believed gambling should be liberalized, others had a different opinion altogether. A few states were quite vocal about introducing licensing policies for online poker operators and casinos, while a few others were in favour of outright banning such services.

Projections for the Future

This treaty is a healthy compromise between the numerous factions and is expected to make all parties happy. According to initial projections, revenue from top online casinos should be in the €50 million per month range in the next year.

Online operators can offer multiple services like sports betting, iGaming, poker, and more using a single domain. But there must be independent sections graphically separating each service. For instance, a person visiting the online casino section should not be able to access sports betting using the same platform.

Players also need to create individual accounts for accessing different platforms, and the operators must verify every account before green-lighting them. The current legislation does not specify how operators must verify these credentials. More details are likely to arrive in the coming months.

The authorities also set a hard cap of €1,000 per month per player across every platform, which means if a player deposits €600 with one operator, he will be left with €400 for the rest of the month when signing up with a second operator.