German sportsbook licensees launch lawsuit against Hesse

The defendant in the lawsuit will be the state of Hesse, which will be represented by the Regional Council of Darmstadt. 

“All holders of permits for the organisation of both land-based and online sports betting have filed lawsuits against individual ancillary provisions in their respective permits,” a spokesperson for the Regional Council told iGB.

Germany’s sports betting legislation set out in the Third State Treaty on Gambling has been widely criticised for putting licensed operators at a disadvantage compared to offshore competition.

While a limit on the number of licences was removed following a series of court cases that delayed it coming into effect from 2012 to 2020, operators still face their in-play offering being limited to match winner markets and total goals scored.

This, German Sports Betting Association (DSWV) has previously raised against the restrictions, with president Mathias Dahms warning the in-play restrictions were particularly likely to push players to the black market.

“It should not be forgotten that live betting is particularly popular and accounts for around 60% of all bets,” he said in January 2020. “Disappointed consumers will turn to black market offerings that don’t comply with legal requirements.”

In 2021, Dahms then noted that German betting revenue had dropped from 2019’s record €9.3bn (£7.84bn/$9.86bn) to €7.8bn after the rules were put in place.

The cost of operating in the market is also particularly high. Players are restricted to a monthly spending limit of €1,000 for all customers – though with limited exceptions – and operators must pay a 5.3% tax on turnover.

Online sports betting licences were issued under the country’s Third State Treaty on Gambling, which was only ratified in March 2019, in its third iteration. The licensing process was then repeatedly delayed, first as no operators applied for licences and then by a lawsuit from Austrian operator Vierklee, before the first licences were finally awarded in late 2020.

Last year, from 1 July, Germany’s Third State Treaty was replaced by a new regulatory framework, which also allowed online casino to be offered nationwide for the first time, while including similarly strict sports betting rules.

This treaty also includes a number of restrictive conditions for casino games, with slot stakes capped at €2. Table games may only be offered separately, with states given the option of handing a monopoly to their lotteries and limited to issuing as many licences as each has land-based casinos. As with sports betting, the 5.3% tax on turnover will be levied on these products. 

So far, no online casino licences have been handed out.