The German Interstate Treaty on Gambling was introduced in July 2021 as a piece of legislation that represented the cornerstone of the government’s efforts to strike a balance between the desire to develop the online gambling industry and the obligation of providing a safe gaming environment. Two years later, the industry is still trying to find the perfect balance.
One of the main objectives of the Interstate Treaty on Gambling was to protect players from gambling harm. For this reason the law introduced strict regulations, including mandatory ID checks and a rather low deposit limit of just 1,000 euros per month. Moreover, the legislation introduced a ban on advertising gambling products during certain hours.
Another aim of the German government was to curb illegal gambling activity, because before 2021 the market was invaded by online casinos which were run by unlicensed operators. The legislation introduced clear regulations and licensing requirements and it seems to have been a success in this regard as recent surveys reported a drop of 65 percent in illegal gambling activity in Germany.
Voices that criticized the Interstate Treaty on Gambling insisted that the strict legislation leaves the German gambling market with a narrow range of products compared to other countries. In fact, the German market does offer a limited range of sports betting products and casino games, but the government intentionally did that in order to promote responsible gambling.
The main goal of the Interstate Treaty on Gambling remains preventing gambling addiction and harm, and that is why the government emphasizes having a secure and controlled gaming environment rather than a wide variety of options.
Strict Advertising Regulations
The strict advertising regulations have also been controversial in the German iGaming industry. The legislation aimed to protect non-gamblers from exposure to gambling content while giving existing gamblers enough opportunity to make informed choices.
However, markets like the United Kingdom and Denmark have demonstrated that more advertising does not necessarily lead to more gamblers. The difference can be made by the type of advertising that is made available. If the advertisements are focused on legal options and player protections, then they can help guide gamblers to make informed decisions.
Overall, the German gambling legislation seems to have reached its goals as they were set out back in 2021. Illegal gambling activity was significantly reduced, players receive enough protection and responsible gaming is promoted. It is also true that there is limited product diversity in this market, but this downside was accepted by the legislator as a necessary trade-off in order to protect player welfare.
Source: “German Gambling Legislation: A Winning Bet for Player Protection?“. European Gaming. October 12, 2023.
