Germany business of gambling

Gambling in Germany

Gambling in Germany is legal. The revenue of German casinos in 2015 was 641 million EUR. The Country is in fourth place among the European Countries with reference to casino profitability. And this is despite the high taxes that are considered one of the most burdensome in Europe. The area of land-based businesses on general issues is regulated by the Interstate Treaty on Gambling 2012. Additional laws are adopted by each of the 16 states individually. Gambling online is banned. A total of over 60 casinos are operating in Germany. Five and a half million people visit casinos on an annual basis. The staff of gambling establishments consists of about 5,000 employees.

Casino Games in Germany

The most popular slot machines are the same as the ones that are popular all around the world: Novomatic, Microgaming, Playtech and others. These are some of the slots that have been popular on German websites: Book of Ra, Lucky Lady’s Charm, Game of Thrones, Jurassic Park, Sherlock Mystery, Spiderman and The Avengers. Slots by Austrian giant Novomatic have proven themselves over many years of operation. Most of them are of high variance and come with a simple interface that hardly ever changes, at the same time they feature high payouts for high-paying symbols. More modern developers, such as Microgaming and Playtech, will attract your attention with colourful and uncommon gameplay, your favourite characters and a large number of bonuses. These slots will often feature multi-level free spins or interactive extra games.

Gambling Legislation

The main law for Germany's gambling industry is the Interstate Treaty on Gambling 2012. The law provides for the protection of users, protection from fraud and measures against the illegal market. The law was approved by 16 states in the same year, 2012. Only Schleswig-Holstein passed this law in 2013. In 2012 Schleswig-Holstein proposed its own law, by which 47 licenses for gambling establishment were issued. What made this law different was that it allowed online gambling. But then the government changed and the province adopted the common Interstate Treaty on Gambling. Slot machines are regulated by the federal law and Trade Regulation Act and Gaming Ordinance. Horse racing is regulated by the 1922 Race Betting and Lottery Act (with the amendments added August 31, 2016). Organisation of illegal gambling is punishable by 2 articles of the German Criminal Code — 284 and 285. The states adopt their own Casino Acts and Casino Ordinances that regulate the gambling business locally. 18 years is the age limit. Land-based casinos in Baden-Württemberg and in Bavaria will not admit any visitors under 21 years of age.

Regulators and laws

Regulators of the gambling industry in Germany are state Ministers or Senators. Ministers or Senators are the ones that have primary responsibility in each state. They are also the ones who appoint the subordinate bodies that are responsible for overseeing the gambling industry locally. Local authorities in the locations of the slot machines are the ones responsible for the machines. They are also the ones that grant licenses and inspect the slots. Sports betting facilities are also under their authority. There are several other regulators involved:

  • Ministry of the Interior and Sports of Hessen - issues licenses for sports betting
  • Regional Council of Darmstadt - issues licenses for horse racing and brokers
  • Ministry of the Interior of Lower Saxony - responsible for blocking the payments and issuing licenses for the national lottery
  • Regional Government of Düsseldorf - grants the permission for TV and online advertising of sports betting and lotteries
  • The authorities of Hamburg and the Rhineland-Palatinate - responsible for some lotteries
  • Tax authorities of Frankfurt am Main - collect taxes from sports betting
  • Tax authorities of Neukölln (district of Berlin) - collect value added tax from online casinos
  • The Federal Minister of Finance can also have an influence on gambling operators

There is also the Gambling Committee comprised of representatives of all the German states. They are also involved in licensing of sports betting and creation of projects for Advertising Guidelines.

Online gambling

Online gambling in Germany is banned almost completely. Only 20 licenses for sports betting have been issued so far. Online bets on horse racing and promotional licenses, however, are allowed. License applicants must prove that they possess sufficient funds, are reliable and have the experience necessary. They also have to show sufficient IT and technical support. Modern licenses for online operations will remain valid until the end of June 2019, even though there is a possibility that the authorities will extend this period until 2024. This is when the experimental period of today's legislation will end. The cost of an online license for sports betting is calculated based on the expected profit. The minimum bet is 0.01% of the annual profit of under 30 million EUR.

Gambling Licensing

Licenses to run land-based casinos in Germany are issued by state authorities. The number of licenses is limited by the local law. In some locations permits are also issued to private operators, and in some other places private operators are totally prohibited from running a gambling business.  Licenses for casinos are issued via a tender. Casino licenses normally remain valid for 10 years with the possibility of extension for 5 more years. The cost is calculated by the estimated gross income of the establishment. It is usually a five or six digit number. The licenses for sports betting points of sale are issued by applying the same pattern. Each state imposes a limit on the number of points of sale. In Bavaria, for example, 400 betting points of sale can operate, and in Hamburg the number is 200. Licenses for slot machines outside of casinos (in restaurants or in arcade halls) are not limited by the law that restricts their number. And yet licensing for arcade halls is regulated very strictly. In many states such establishments must be located a certain distance from schools, colleges and rehabilitation centres. The maximum number of slot machines for one hall is 12. Restaurants and bars can have no more than three slot machines. The cost of the license for an arcade hall ranges from 150 to 3,000 EUR depending on the number of staff members. Bookmakers licenses and sweepstakes are regulated by the Race Betting Lottery Act and are only issued to horse racetracks and horse breeders.

Licensed varieties of gambling

There is no specific list of games that are allowed or banned. And yet some games are regulated more rigidly than others. For example, Germany has established a state monopoly on lotteries. Sports bets are subject to a number of severe restrictions, and online gambling is banned altogether. These are the types of gambling available in Germany: Poker, Betting, Sport bets, Horse racing, Casino games (the roulette, baccarat, blackjack, punto banco, dice, etc.), Slot machines and other gaming machines, Games on terminals, Bingo and Lotteries. Each state provides its own rules for regulating the gambling industry. The slots are mostly regulated by the federal law.

Development of the Gambling Market in Germany

There are two major developers that are based in Germany: Bally Wulff Automaten and Gauselmann Group. These companies are currently lead in development of the gambling market in Germany Bally Wulff Automaten is a developer of gaming cabinets and slot machines. The company is based in Berlin and primarily targets the German market. The company was founded back in 1950. Right now the company is owned by SCHMIDT Group, which is a major German supplier of IT products. Gauselmann Group is a corporation that designs games, slots and cabinets, builds entertainment centres and casinos and develops the solutions for sports betting and bingo. The company also supplies financial management systems.There are many things that Germany is missing out on by banning online gambling business. The so-called grey market of online games is estimated in the amount of 960 million EUR annually. The online market generates up to 8% of the overall profit. Big tax revenues are lost at the same time. The land-based market in Germany continues to flourish. Up to 24 billion EUR of revenue is received on an annual basis. But the online business is gaining more and more popularity and they should not hesitate to regulate it properly. 

Your review