Gambling business in Germany

germanyGambling business in Germany is legalized. The revenue of German casinos in 2015 amounted to 641 million EUR. The country is in fourth place among European countries in terms of casino profitability. This despite high taxes, which are considered one of the most onerous in Europe.

The general ground business is governed by Interstate Treaty on Gambling 2012. Additional laws are enacted separately by each of the 16 states. Online gambling is prohibited.

More than 60 casinos operate in Germany. Five and a half million people visit them every year. The staff of gambling establishments is about 5,000 employees.

Gambling legislation

The main law in the German gambling business is Interstate Treaty on Gambling 2012. It defines the protection of users, protection against fraud and measures against the illegal market. The law was passed by sixteen states in the same 2012. Only Schleswig-Holstein accepted it in 2013.

The state of Schleswig-Holstein in January 2012 proposed its own law, which issued 47 licenses for gambling establishments. The difference with this act was that it allowed online business. But then the government changed, and the province adopted a common Interstate Treaty on Gambling.

Slot machines are governed by federal law and the Trade Regulation Act and the Gaming Ordinance. Horse racing is controlled by the Federal Race Betting and Lottery Act of 1922 (as amended on August 31, 2016).

Organizing illegal games is punishable under two articles of the German Criminal Code – 284 and 285.

The states form their own Casino Acts and Casino Ordinances separately, which regulate local gambling.

The age limit is 18 years old. Land-based casinos in Baden-Württemberg and Bavaria do not allow visitors under the age of 21.

Gambling Regulators and Gambling Laws

Gambling regulators in Germany are state ministers or senators. In each state, ministers or senators have primary responsibility. They also appoint subordinate bodies responsible for organizing the gambling business in the field.

Local authorities are responsible for slot machines, on whose territory the machines are located. They also license and inspect slots. Sports betting points also belong to their powers.

There are a few more regulators:

  • Ministry of the Interior and Sports of Hesse – issues licenses for sports betting;
  • Darmstadt Regional Council – issues licenses for horse racing and brokers;
  • Lower Saxony Ministry of the Interior – responsible for blocking payments and issuing licenses for the national lottery;
  • Düsseldorf Regional Government – allows TV and online advertising for sports betting and lotteries;
    the authorities of Hamburg and Rinland-Palatinate – responsible for some lotteries;
  • tax authorities in Frankfurt am Main – collect taxes on sports bets;
  • tax authorities in Neukölln (Berlin district) – collect value added tax on online casinos;
  • The Federal Minister of Finance can also influence gambling operators.

There is also a Gambling Committee of representatives from all German states. They also participate in sports betting licensing and Advertising Guidelines projects.

Conditions for obtaining a license in a gambling jurisdiction

Licenses for operating land-based casinos in Germany are issued by state authorities. The number of licenses is limited by local law. Somewhere permits are also issued to private operators, while somewhere they are completely prohibited from running a gambling business. Casino licenses are issued through a tender.

Typically, casino licenses are valid for 10 years with the option to renew for another 5 years. The cost is calculated based on the estimated gross income of the establishment. Typically a digit contains five to six zeros.

Licenses for sports betting sites are issued in the same way. Each state limits the number of points. For example, in Bavaria there can be 400 outlets, and in Hamburg – 200.

Licenses for slot machines outside the casino (in restaurants or arcade rooms) are not limited by law in number. However, licenses for arcade halls are very tightly regulated.

Such facilities in many states must be at a certain distance from schools, universities and addiction treatment centers. The maximum number of slot machines for one hall is 12 machines. Restaurants and bars must have no more than three slot machines. The cost of a license for an arcade hall is 150-3000 EUR depending on the state.

Bookmaker or sweepstakes licenses are governed by the Race Betting Lottery Act and are only issued to horse tracks or horse breeders.

Licensed varieties of gambling

There is no specific list of allowed and prohibited games. However, some games are more heavily regulated than others. For example, Germany has established a state monopoly on the lottery. Sports betting is subject to a number of strict restrictions, and online gambling is prohibited at all.

The following types of gambling are available in Germany:

  • poker;
  • betting;
  • sports betting;
  • horse racing and betting on them;
  • casino games (roulette, baccarat, blackjack, punto banco, craps, etc.);
  • slot machines and other machines;
  • terminal games;
  • bingo;
  • lottery.

Each state has its own rules for regulating gambling. Slot machines are mostly regulated by federal law.

Online gambling in the country

Online gambling in Germany is almost completely banned. Only 20 licenses for online sports betting have been issued. On the other hand, online betting on horse racing and promo licenses are allowed.

Applicants for licensing must prove that they have sufficient financial resources, are reliable and with the necessary experience. They also prove sufficient IT and technical supply.

Modern licenses for online activities are valid until the end of June 2019, although there is a possibility that the authorities will extend this period until 2024. Thereafter, the pilot period of the current legislation will end.

The cost of an online sports betting license is calculated on the expected income. The minimum rate is 0.01% for annual income up to EUR 30 million.

Popular slot machines in the country

Among the most popular slot machines are machines from manufacturers that are popular all over the world: Greentube, Microgaming, Playtech and others. Here is an example of the most popular slots on German sites:

  • Book of Ra;
  • Lucky Lady’s Charm;
  • Game of Thrones;
  • Jurassic Park;
  • Sherlock Mistery;
  • Spiderman;
  • The Avengers.

The slot machines of the Austrian giant Greentube have proven themselves over the years. They are often highly volatile, with a fairly simple and almost never changing interface, and they also offer high payouts for expensive symbols.

More modern vendors like Microgaming and Playtech attract attention with their bright and unusual gameplay, favorite characters and a lot of bonuses. Such slots often have multilevel free spins or interactive additional games.

Gambling software developers

There are two major manufacturers based in Germany:

  • Bally Wulff Automaten;
  • Gauselmann Group.

Bally Wulff Automaten is a cabinet and slot machine manufacturer. The developer is based in Berlin and mainly focuses on the German market. The company was founded in 1950. The company is now owned by the SCHMIDT Group, a major German supplier of IT products.

Gauselmann Group is a corporation that produces games and slot machines, cabinets, builds entertainment centers and casinos, develops solutions for sports betting and bingo. Also supplies systems for financial management.

Findings

Germany is losing a lot by banning online gambling. The so-called gray market for online games is estimated annually at up to 960 million EUR. The online marketplace generates up to 8% of total revenue. Together with this, large tax revenues are lost.

The German land market continues to thrive. Up to EUR 24 billion of revenue continues to flow annually. But it should be borne in mind that online business is gaining more and more positions, and you should not hesitate to properly regulate it.

Gambling business in Germany

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