German market thrown into doubt with new licensing requirements
Restrictions on gaming, stake limits on betting and CSR requirements could hit operator revenues
Germany’s sports betting and online casino market faces an uncertain future following confirmation from Hesse regulators yesterday that restrictions in draft sports betting legislation would be included in the new licencing regime launching in 2020.
Under the confirmed standards, which were initially released in draft form last month, sports betting operators applying for interim sports betting licences would be required to cease all online casino operations immediately.
They would also be asked to implement restrictions on in-play betting, together with a maximum stake limit of €1,000 per customer per month. In addition, German regulators have confirmed they will actively block online casino websites operators using the .com domain designation for the first time.
These interim sports betting licences will run until passage of the Interstate Gambling Treaty, which is expected to pass into law in July 2021, subject to approval from all 16 states.
Hesse regulators outlined the proposed sports betting requirements yesterday Source: DLA Piper
Hesse officials said they expect as many as 160 licence applications when the process goes live in January 2020, with operator applications being accepted on a “first come first served” basis, albeit with no cap.
The confirmation of certain clauses in the legislation was met with different reactions by industry stakeholder, with analyst firm Regulus Partners warning: “Operators and suppliers with a material exposure to German gaming, betting VIPs and/or in-play should be prepared to lose this revenue in the relatively short term, one way or another.
Regulus said operators could either accept and comply with the new regulations to get a betting licence, potentially reducing their revenues by as much as 70% thanks to the restrictions on casino and stakes.
Alternatively, operators could partially comply, maintain their online gaming operations and risk enforcement penalties from German regulators. Finally, Regulus said some might continue .com operations, challenging the regulations through the courts.
However, EGR understands Germany-facing operators have played down the impact of such restrictions in meetings with investors, stating the belief that nothing has changed on casino, and that stake limits could be relaxed if firms remain compliant with other provisions.