German grey market set to continue as states refuse new gambling treaty

The German state of Schleswig-Holstein has announced it will not ratify the proposed new State Treaty on Gambling potentially prolonging the country’s grey market.

The new treaty would have limited in-play betting, put a €1,000 pcm limit on customer stake and effectively banned gaming.

And while the leaders of the 16 German states signed the treaty back in March, it still required approval from the state parliaments.

Schleswig-Holstein said it would not ratify the treaty, arguing for an entire new law that includes licences for online casinos, while North Rhine-Westphalia also announced it will not ratify the new law.

It means the treaty won’t come into force on 1 January 2018 as planned, and the current grey market scenario persists, whereby sports betting is tolerated for EU-licensed operators as long as they comply with material regulatory requirements like advertising restrictions and AML obligations.

The announcement is likely welcome news for Germany-facing operators, who would have faced major disruption to their business models should the treaty have come into force.