Germany’s Newly Inaugurated Gaming Regulator Issues First Fine

For the first time in its brief history, Germany’s Gemeinsamen Glücksspielbehörde der Länder (GGL) has imposed a fine on a gaming operator. The new German gaming regulator just took over at the beginning of the year and immediately got to work implementing and enforcing unified rules for the gaming industry.

Ronald Benter (left) and Benjamin Schwanke cut the ribbon for the official opening of the authority of the GGL
Ronald Benter (left) and Benjamin Schwanke cut the ribbon for the official opening of the authority of the GGL. The regulator has issued its first fine since taking over in January. (Image: Mitteldeutsche Zeitung)

The GGL said in its notice about the violation that the unidentified company had violated advertising rules. It promoted its products on websites that also promote offshore operators, which violates the standing State Treaty on Gambling.

The regulator added that it issued a five-figure fine to the company for the violation. However, like with the name of the operator, it didn’t specify the exact amount.

Deliberate Intent

The GGL said that the operator “deliberately” promoted its activities on different websites that also promote unlicensed options. In Germany, legal providers cannot place advertisements on websites that also contain advertisements for unlicensed providers. This is a part of Germany’s new  GlücksspielNeuregulierungStaatsVerag, the state gambling treaty that entered into force on July 1, 2021.

After the introduction of the new laws,  online casinos in Germany could only operate if they had a license. This has led to several lawsuits against operators, including PokerStars, with players suing to recover their losses when the operator acted illegally in the country.

As a result of the willful violation, the GGL hit the operator with a fine of at least €10,000 (US$10,622). When announcing it, CEO Ronald Benter warned that the regulator will “impose heavy fines for violations” and possibly withdraw the licenses of repeat offenders.

The regulator also pointed out that players can check the official list of the GGL to see which online providers have a license. This way, they know for sure that they use only those providers that meet the required protection and risk management the GGL prescribes.

Germany has been busy approving new online gaming licenses over the past year, with another push having arrived in January. However, with less than 12 months of activity, it’s still too early to determine if the new unified regulated online market will be effective.

GGL Questions Black Market Claims

There have been reports that the lack of progress in Germany’s online gaming introduction is leading to an increase in the use of black market alternatives. DSWV, a trade group representing Germany’s sports betting space, recently reported that there has been a “significant decline” in participation in the regulated segment.

Fueling this transition are the new gaming rules, which the DSWV has asserted are overly restrictive. However, the GGL denies the claims.

Benter asserts that, according to GGL analysis, “less than 5%” of sports bets occur in the unregulated space. He based the figure, in part, on tax data the Federal Ministry of Finance has available.

Except, many who use offshore options don’t pay taxes on their winnings. Therefore, it would be improbable and more than a little difficult to put a number on the amount of wagers taking place on unregulated platforms.

A court judge has already ruled that ISPs don’t have to block access to certain gaming websites, making it easier for consumers to play offshore. In addition, there’s nothing preventing the use of a VPN to bypass geolocation and other restrictions.

There are reportedly over 400 unlicensed gaming sites targeting the German market. Therefore, and with no long-running online gambling revenue to track, it’s impossible to accurately determine one way or another the rise or fall of offshore revenue.

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