Germany’s gambling regulator GGL has fined Red Rhino €50,000 for offering online gambling in Germany despite an enforceable prohibition order.

Red Rhino discontinued its gambling offerings on localised website but continued to operate on a website with the same domain ending in “.com.”

Furthermore, a significant penalty was imposed on a payment service provider associated with Red Rhino Limited, although the specific name was not disclosed.

The GGL said it is signalling its commitment to taking consistent measures against unauthorised online gambling providers and is utilising all available administrative means.

In addition, the GGL emphasised that penalty payments can be repeated or increased until the prohibition order is fully adhered to.

Co-CEO Benjamin Schwanke commented: “The GGL’s measures are having an impact and we are seeing an increasing pushback on existing unauthorised online gambling offers.”

Fellow board member Ronald Benter added: “This goes hand in hand with channeling to legal offers. Consumers should make sure that they only use legal online gambling offers, as the strict legal player protection measures are supervised by the GGL.”

All authorised providers are listed on the official whitelist.

Earlier this year, the GGL revealed it had identified 200 black market operators, with more than 60% of them operating from Curacao.

To provide players with a clear distinction between regulated and offshore gambling websites, the authority also unveiled a new “GGL test and approval seal” that authorised operators are required to display on their websites.

Industry concerns

The regulator also maintains strict rules regarding affiliate marketing, expecting operators to avoid any association with unregulated counterparts.

Earlier this year, the GGL imposed a fine on an undisclosed licensed operator for violating advertising regulations, as it intentionally advertised on affiliate sites endorsing unregulated gambling services.

This, the GGL said, contravenes Germany’s State Treaty on Gambling advertising provisions, aimed at guiding players toward the regulated market by clearly distinguishing legal and illegal offerings.

This practice, according to the regulator, contradicted the advertising rules laid out in Germany’s State Treaty on Gambling, which aims to safeguard players by clearly distinguishing between legal and illegal offerings to steer players toward the regulated market.

iGaming NEXT understands that there are concerns within some quarters of the industry regarding the potential application of similar rules for game providers.

They fear that in the future the regulator may also restrict the offering of GGL-approved games to unregulated operators.

LeoVegas Group has been granted regulatory approval by the Federal States’ Joint Gambling Authority (GGL) to offer online slots in Germany. 

The German regulator has added LVSports Limited, an entity of the LeoVegas Group, to its whitelist of approved operators.

LeoVegas can now start offering virtual slot games across all German states and conduct marketing activities across the country.

The operator said the approval represents a significant opportunity for the group, as Germany is one of Europe’s largest iGaming markets.

Gustaf Hagman, CEO at LeoVegas Group, said: “We are looking forward to launching LeoVegas in Germany under the new nationwide licence.

“With our track record of regulated markets, we will ensure the greatest iGaming experience with a high level of consumer protection,” he added.

LeoVegas’ German history

LeoVegas has repeatedly referred to losses suffered as a result of recent changes in the German market.

In its 2021 annual report, the company said it recorded growth of 1%, but that without the negative impact of the German market, growth would have amounted to 16%.

More recently in Q4 2022, LeoVegas’ adjusted EBITDA dropped 68% year-on-year amid rising costs and market exits.

While the operator reported a 4% increase in NGR in its Rest of Europe category, growth was still negatively impacted by Germany, it said.

LeoVegas expanded its presence in Germany back in 2018, when it acquired acquired World of Sportsbetting for €2.6m.

At the time, the brand held a sports betting licence and a casino licence in the German state of Schleswig-Holstein, as well as an approved application for a sports betting licence in the state of Hessen.

However, the advent of the Fourth Interstate Treaty on gambling, which covers all German states and led to the re-regulation of the German gambling market in July 2021, meant licensed operators had to re-apply.

The approval from the German regulator is certainly good news for LeoVegas’ new owners MGM Resorts.

Germany presents a valuable opportunity for the operator to expand its reach internationally, by leveraging LeoVegas’ expertise in the German market.

The German market continues to court controversy among the iGaming community as the country makes progress in regulating its online casino industry.

An eighth operator – Jokerstar –  has been added to the country’s whitelist today (19 August).

Jokerstar will join seven other businesses, which together operate a total of 11 websites, that have already secured approval to offer online slot games to players in Germany.

So far Germany’s new gambling regulator, the Gemeinsame Glücksspielbehörde der Länder (GGL), is off to a rocky start.

The iGaming industry has repeatedly criticised the conditions imposed by Germany’s Fourth Interstate Treaty of Gambling, describing the law as overly restrictive when it comes to deposit limits and product offerings, as well as advertising and affiliate marketing.

When the authority began its work on 1 July, it had to defend the country’s licensing progress, with many operators saying the country was slow in processing applications.

Shortly after, the GGL hit the headlines because its IP blocking push stalled as leading internet service providers refused to enforce the regulator’s “informal” requests.

However, iGaming NEXT understands that questions about the transparency of the licensing progress continue to reverberate across the industry.

One reason for this is that seven of the 11 brands on the whitelist are connected to either Germany’s largest gambling operator the Gauselmann Group, or to Austrian gambling giant Novomatic.

A joint venture between Novomatic and Merkur was in fact the first operator to be given an online slots licence in May.

Initially named Mernov, the company rebranded to Deutsche Gesellschaft für Glücksspiel (DGGS) earlier in August and runs the Bing Bong and Jackpot Piraten brands.

KaFe Rocks co-founder Feda Mecan: “Both Gauselmann and Novomatic had several scandals in the past and were linked to donations to political parties. So, it is surprising to see that they account for such a large share of companies on the whitelist.”

Moreover, Gauselmann subsidiary Cashpoint Malta gained approval for its, and portals, while Novomatic subsidiary BluBet Operations got the greenlight for its site.

Solis Ortus Service, another Gauselmann venture, and its website was also added to the whitelist.

Meanwhile, one member of the state parliament in Saxony-Anhalt, Jan Scharfenort, pointed to a number of political scandals involving the two companies.

The member of the ring-wing party AfD sent in a formal query to the state government raising a number of questions about the licensing of the Gauselmann-Novomatic joint venture.

He highlighted a 2019 bribery investigation – the so-called Casino Affair – in Austria, involving Novomatic and several high-ranking political figures.

In Gauselmann’s case, he pointed out that Germany’s Süddeutsche Zeitung reported in 2011 that the German gambling giant had secretly contributed more than €1m to political parties since 1990, in a bid to prevent further regulation of the gambling industry.

While technically the donations were not illegal, they were made under an array of names, including those of numerous company employees and members of Gauselmann’s family, prompting suspicion that the company had attempted to keep the contributions secret.

Indeed, this situation has not gone unnoticed across the iGaming industry.

Industry investor and co-founder of affiliate group KaFe Rocks, Feda Mecan, told iGaming NEXT: “Both Gauselmann and Novomatic had several scandals in the past and were linked to donations to political parties. So, it is surprising to see that they account for such a large share of companies on the whitelist.”

iGamingNEXT reached out to the GGL for comment but has yet to receive a reply.