Regulation

German State Treaty ratified by 13 Länder

| By Robin Harrison
Germany’s new, expanded regulatory framework for gambling moved closer to implementation, after the state parliaments in Schleswig-Holstein and Sachsen ratified the treaty.
Germany

Approval from the state legislatures mean that 13 of the country’s 16 federal states have now ratified the Glücksspielneuregulierungstaatsvertrag (GlüNeuRStV), according to the Deutscher Sportwettenverband’s tracker. 

It required approval from at least 13 to be implemented, per Article 3 of the legislation.

This means just Sachsen-Anhalt – which is to host a new federal regulator – Nordrhein-Westfalen and Saarland are yet to sign off on the legislation. 

The legislation has already been ratified by the state Minister-Presidents, in November 2020.

In Saschen, the GlüNeuRStV passed despite the Alternative für Deutschland party abstaining, and left-leaning parties voting against the bill. 

Under the Treaty, the state is to host a new federal regulatory authority for gambling, that likely to take two years to be fully operational. 

A submission from operator association the Deutscher Sportwettenverband (DSWV) attempted to use the Saschen debate on the GlüNeuRStV to force changes to the rate of taxation being applied to online slots and poker. 

It argued against the planned 5.3% tax on turnover for these products, saying such a high rate would mean regulated brands would struggle to generate returns from the market, to the ultimate benefit of offshore operators. 

With a 5.3% turnover tax being mooted, the DSWV urged the parliament to make its approval of the Treaty contingent on a fairer tax structure being implemented. It suggested that if a turnover tax was to be levied, it should be no higher than 1%, adding that a more viable rate would be a gross revenue tax of between 15% and 20%. 

However the GlüNeuRStV was passed without any condition being attached. 

Schleswig Holstein, meanwhile, will end its breakaway, liberal regulatory gambling framework in order to join the State Treaty. 

It split from Germany’s other states in 2012, at a time when only online sports betting was to be regulated at federal level, to launch a regime covering online casino, with no limits on licence numbers, and a 20% gross revenue tax. 

While those licences had begun to expire in December 2018, it then renewed the regulations in 2019, while a new federal framework was developed.

The state’s Interior Minister Sabine Sütterlin-Waack said the fact Schleswig-Holstein’s fellow Länder had ultimately opted for a more expansive model in the GlüNeuRStV showed the state was right to go it alone in 2012.

“We are now considered pioneers,” Sütterlin-Waack said. “Our path in gambling has proved to be correct.”

In particular she talked up the player protection measures included in the Treaty.

“I am sure that through the trifecta of partial legalisation of online gambling, strict monitoring and consistent regulation, we will succeed,” she said. “Together with the other states we can steer gambling into orderly and monitored channels and thus fight the black market.”

Unlike the Schleswig-Holstein model, the GlüNeuRStV aims to significantly limit online casino

Slots will be subject to a €1 per spin stake cap, with a five-second average spin speed also mandatory. Table games, meanwhile, must be offered separately, and states will have the option to grant lotteries a monopoly for the product. 

These measures are already in place for operators active in the market through a transitional regime, which began on 15 October, 2020. Operators were given a three-month window to implement the stake cap and spin speeds, provided they had connected to a national self-exclusion database by the beginning of the transition. 

Sports betting, meanwhile, is already underway with 22 licences awarded since October last year.