On July 1, 2021, a new gambling law comes into force in Germany. The State Treaty on the Legalization of Gambling (GluNeuRStV) was adopted in March 2020, when the ratification pact was signed by the ministers-presidents of 16 federal states. It is planned that the new legislation will have a beneficial effect on online casino and slot machine operators.
- Want to know more? History of gambling regulation in Germany
What will the legalization of the German market do? Expert forecasts
According to Gold media, by 2024, the revenue of the German gambling market will have reached 18.2 billion euros, of which 3.3 billion euros will be made online. This conclusion is based on the analysis of market trends after the end of the COVID-19 pandemic and the planned changes in German gambling law.
At the same time, a number of analysts do not share this optimism. According to them, 17% of online operators in Germany will still use licenses issued abroad.
According to the German slot machine association Deutsche Automatenwirtschaft, the ratification will impact positively on the country’s market. This will allow each land to issue local licenses and conduct a better assessment of the licensee’s integrity and business reputation than a centralized authority could do.
- On June 16, 2021, SiGMA Group will hold another event as part of the Sigma RoadShow tour. This time, experts will discuss the regulation of gambling in Germany.
How is gambling regulated in Germany?
The new law will allow licensed online casino operators to offer games across the country, not just in the federal state of Schleswig-Holstein.
For an even distribution of rights, duties and responsibilities, the regulation of different industries is assigned to the bodies of different federal states:
- The basic regulation (the issuance of gambling licenses and control) will be assigned to the office located in the state of Saxony-Anhalt.
- In Lower Saxony, decisions are being made to block payments for illegal gambling that cross land borders.
At the same time, each federal state can make a separate decision — to establish a monopoly, to issue or not to issue licenses for various types of games.
All previous licenses of gambling operators will be revoked. To operate in the German market, operators will be required to have a German license with a single nationwide regulatory catalog.
German licenses will also be needed for companies with an EU license that previously provided their services in Germany. If the relevant application is not submitted, they will not be able to work in the German market.
Online casinos wishing to obtain a German license must stop offering table games (roulette, baccarat, blackjack) and live games.
In addition, gambling sites with a German license will no longer be called casinos and will not contain the terms ” Spielbank “or ” Spielhalle”, which are synonymous with the word “casino”.
Casino taxation in Germany
In May 2021, the Committees of the German Parliament began to consider a draft federal law that establishes the taxation of online gambling. The bill must be passed by deputies before July 2021.
The draft law suggests a tax rate of 5.3% of the turnover of gambling operators.
According to the European Gaming and Betting Association (EGBA), such a bet will negatively affect the development of the market.
This is due to data that was previously provided by the analytical company Goldmedia. The study showed that most players are afraid of reducing their winnings: licensed operators will want to compensate for losses. In this situation, the majority of gamblers — up to 49% – plan to switch to offshore online casinos.
The new tax also violates the European norm on fair competition and the prohibition of privileges. The rate for online platforms is 15 times higher than the rate from the revenue of land-based slot machine halls and 5 times higher than for land-based casinos.
At the moment, representatives of the gambling industry are calling on the German authorities to review the bill and reduce the rate. We will follow the news!
How to work with the target audience of players from Germany?
Germany remains an extremely attractive online gambling market. Despite all the restrictions and prohibitions, it is one of the largest economies in Europe. With a population of just over 83 million, the country is ranked sixth in the world in terms of living standards. From January 1, 2020, the minimum wage in the country of labor is 1584 euros per month.
According to a study by the Stiftung für Zukunftsfragen foundation, which was conducted in early 2020, most Germans are fans of passive recreation and do not like to go out for entertainment from home. 78% of respondents like to sit on the Internet as a holiday. At the same time, 11% of the surveyed Germans like to spend their free time gambling, during the pandemic, holidays, quarantine restrictions, people are forced to look for entertainment on the Internet more often.
According to data from the end of 2017 (a study by the INSA Institute), one in six Germans over the age of 18 regularly or occasionally plays on money in slot machines. The total number of players is 12, which is 12% of the population of Germany.
Traffic sources to find a German audience:
- search traffic: in the country the most popular is Google
- social networks: Facebook and Twitter are the leaders, followed by the local network StayFriends.de (especially popular with Germans in their 30s), the last is Instagram.
Methods of delivering and withdrawing money in German casinos
Up to date, the most popular payment systems among German bookmakers are:
- bank cards (Visa/MasterCard);
- e-wallets (Skrill, Neteller);
- payment systems (iDEAL, Sofort, Giropay) and others.
Players Protection in online casinos in Germany
The new law requires license holders to enforce a wide range of operational measures to protect players. The centralized database of excluded players is being projected.
- Online gambling operators must make a security deposit based on the company’s monthly turnover. Smaller operators are expected to pay a minimum of 5 million euros, while larger companies may be required to pay up to 50 million euros.
- The maximum bet is 1 euro.
- The monthly limit for the player in the online casino will be 1000 euros (in all casinos owned by the operator). If the player wants to raise the set limit (up to 30,000 euros), then his request and change will occur only after 7 days; the request to lower the limit is accepted immediately.
- Autoplay should be disabled. Online slots must have a five-second interval between spins, the so-called “thinking time”. When switching from one type of game to another, the pause will be 1 minute, when switching to another site-the pause increases to 5 minutes.
- The user cannot access several gambling sites at the same time.
- There should be a “panic button” on the site, when one clicks on it, they can immediately self-exclude.
- Operators cannot offer demo versions of games.
Some restrictions apply to poker rooms:
- a player can play at of four tables maximum at the same time;
- the player does not have an opportunity to choose a seat at the table, landing is made randomly;
- transfers between players within the room are prohibited.
As a result, Pokerstars restricted access for Germans to its European network, and Winamax, Redbet and Ladbrokes left the German online poker market.
The most popular online casinos and game providers in Germany
The top 5 popular German casinos include sites from well-known brands:
Choose offers from these and other gambling establishments that are looking for traffic from Germany, pour traffic and earn money right now!
Prior to the full implementation of the law (July 1, 2021), market participants were given a transition period to bring their games and websites into compliance with the law. Some well-known providers have already announced that their products are ready for further activity in the German gambling market.
- The Microgaming provider has adopted the new rules and launched a number of products that are compatible with the German Tolerance Policy and the general gambling rules. The German market will feature more than 150 slots, including Book of Oz, 9 Masks of Fire, and Bonanza.
- ORYX Gaming has also adjusted a significant portion of its content to fully comply with German regulations.
- Manufacturer Betsoft Gaming said that the company’s games comply with all the requirements of the German authorities.
Features of affiliate marketing under the new rules in Germany
Changes in the legislation for German casinos will radically change the gambling industry. The most important thing is that the new German law legitimizes the online sector. This means that new projects and well-known brands will have more opportunities to expand.
On the other hand, one of the provisions in the new gambling law prohibits operators from using affiliate links or paying partners a percentage of their income in Germany. This means that affiliate marketing in the gambling industry is almost completely prohibited.
Several gambling operators have already informed their affiliates of the need to stop advertising casinos in Germany using their brand.
GVC (owner of the brands bwin, Sportingbet, Ladbrokes, Gamebookers) sent out a letter demanding to remove all banners and advertising text related to casino and poker products, to stop any activity on social networks and applications aimed at German players.
Bet365 has also instructed its affiliates to cease advertising activities in Germany, and banned the promotion of other competitors’ gaming offerings when promoting bet365.
The restrictions are tough. However, Germany has just embarked on the path of regulation, and the authorities have not yet taken into account all the points. For example, the mechanism for blocking sites that will work without a German license is unclear. Also, it is not specified anywhere what penalties can be applied to violators.
The conclusion is one: as long as there is an audience ready to pay money, you need to look for ways and options, do not wait and pour traffic now!