Sports betting operators in Germany are struggling to receive the green light to accept player deposits exceeding the €1,000 monthly limit, even though exemptions allowing deposits up to €30,000 should be possible in some cases.
Joerg Hofmann, head of the gaming and betting law practice of Melchers Law Firm in Germany, shared this during a recent webinar providing an update on gaming in Germany.
Although Germany’s Fourth Interstate Treaty introduced stringent player protection measures and deposit limits, there are certain exemptions for sports betting operators, in particular for those that applied for a licence under Germany’s previous regime.
While operators had to observe a €1,000 stake limit under the previous Interstate Treaty, they were able to apply for higher stake limits with the Regional Council of Darmstadt, which had been tasked with issuing sports betting licences.
Provided certain conditions were met, such as setting a maximum bet amount and a special loss limit, operators were allowed to implement stake limits up to €10,000 or even up to €30,000 under the regime.
When in July 2021 Germany’s Fourth Interstate Treaty entered into force, it removed the stake limit in favour of a deposit limit, which was set at €1,000 per player per month and which applies across all gambling platforms.
However, the previous extended stake limits of €10,000 and €30,000 were then considered to be new “extended deposit limits” which the Regional Council in Darmstadt was able to grant, Hofmann said.
Thus far, the Regional Council in Darmstadt has whitelisted 34 sports betting operators. However, according to Hofmann many others are still waiting for their licences, with delays caused by various factors including limited staff capacity in Darmstadt and a lengthy licensing procedure.
There are concerns in the industry that the Regional Council in Darmstadt will not be able to process the pending applications before the end of 2022, when it will need to transfer its powers to the GGL. The industry is now questioning what this means for future deposit limit extensions.
Melchers Law Firm senior partner Joerg Hofmann: “According to information which has yet to be officially confirmed, the Regional Council in Darmstadt will only focus on processing the pending applications and will not make any decisions about deposit limits. If this is true it means that the GGL would need to take over but the GGL can only make a decision after 1 January 2023,”
The GGL started operating on 1 July. However, initially it will only focus on fighting illegal gambling and advertising, before also taking charge of the licensing process on 1 January 2023.
“According to information which has yet to be officially confirmed, the Regional Council in Darmstadt will only focus on processing the pending applications and will not make any decisions about deposit limits. If this is true it means that the GGL would need to take over but the GGL can only make a decision after 1 January 2023,” Hofmann said.
“This would be a disastrous situation for the industry, as operators will most likely face a delay and an extended period during which they will only be able to accept €1,000 deposits per month,” Hofmann said.
Moreover, he highlighted that there are some issues with Germany’s gaming supervision system LUGAS, which aims to ensure that websites abide by deposit limits and prevents players from using multiple websites to circumvent the limits.
“Currently, the LUGAS system is not able to check deposits beyond €1,000. That’s for technical reasons. So, there are still some issues that need to get fixed before the beginning of next year,” Hofmann said.
The gambling industry also raised concerns over data protection when LUGAS was first introduced.
There is a need for immediate communication between the industry and the regulators, Hoffmann concluded. However, he also highlighted that he has confidence in the GGL’s ability to create and enforce a properly regulated market in Germany in the near future.
It is not yet known whether deposit limit extensions will be brought in for operators of online slots and poker.