German States Regulate Online Gambling

15 of the 16 states that make up Germany have approved on Thursday 15th December 2011 the new German online gambling treaty that will grant 20 operators a license to offer online sports betting service. The operators will be liable for a 5 percent turnover tax.

The new legislation was first agreed upon back in November amid strong criticism from politicians, European online gambling operators and the Remote Gambling Association (RGA). Regardless of the criticism it was finally agreed upon.

This new legislation raises many concerns with regards to how it limits online gambling by prohibiting casino and poker games but allowing sports betting, and concerns with regards to compliance with EU legislation as it gives preference to local operators thus discriminating against operators from other European countries. This stands in contradiction to EU fair trade and competition laws.

Only one German state Schleswig-Holstein did not join the new legislation due to it passing its own type of online gambling legislation after it grew frustrated with the delays in reaching a workable solution for the German online gambling market.

Schleswig-Holstein also had problems with many of the restrictions other German states wanted to impose. Therefore it created its own online gambling legislation which was welcomed by operators, the European Commission and the RGA.

Many in Germany and outside of it feel that the new legislation by the 15 states will not gain European Commission approval and even if it will, the laws proposed are not workable and some States will end up abandoning the legislative treaty and opting for the Schleswig-Holstein model instead.