The key obstacles online firms need to overcome in Germany
Sigma Software's Sergey Logvinenko urges operators to focus on tech to avoid regulatory headaches down the line
It is not a secret that Germany’s igaming market is an interesting tidbit for any business. It is the second largest market in the EU after the UK and one of the world’s biggest, so everyone would love to have a piece of the pie.
All legal operators are expecting changes in July 2021 when the Interstate Treaty goes live and allows online legal gaming. We are not sure what to expect as the details of the Treaty become effective, but we have had plenty of time and every operator and supplier will be ready for this new policy in the end.
Everything changed on 10 September 2020 when 16 German federal states agreed to a transitional period starting from 12 October, the first phase, and 15 December, the second phase. It was decided not to pursue legal suits against online slots currently being offered in the unregulated market. It is an excellent opportunity to go live legally a little bit earlier and everyone will try to grasp this opportunity.
At the same time, this transitional period includes some specific compliance rules requiring software changes from the operator and supplier side. It is also expected that only companies that completely follow these rules will next year be given a licence or at least get priority to obtain one.
It would be fair and would make sense if there were a longer term than just between 10 September and 12 October. All companies who want to become legal in the German market are in a rush to implement these rules. Here are some of them:
- Operators must comply with the technically feasible player protection requirements of the GlüStV 2021
- Prohibition on auto-play
- Virtual slots games should last at least five seconds and the stakes are limited to €1 per game
- The assignment of players to a virtual table must be random
One month to clarify requirements, define what has to be done, plan how to follow them, and implement and verify them is quite a limited time in which to do so correctly. I’m not saying it is impossible, on the contrary it is possible, but there is the concern that players may not get a quality product in the end.
All companies interested in the licence will surely participate and many of them will have to deliver something. But there is potential for issues such as:
(1) not being implemented 100% or
(2) 100% implemented, but not tested properly or
(3) implemented and tested but made in a “messy” way.
The first two points are well known to companies involved in the software development business. A lot of issues will become visible soon and they will have to be fixed. There are no other options.
I am mostly worried about point number three – “implemented and tested, but done in a ‘messy’ way”. As a software development company, which puts great focus on the quality of technical solutions, we have been faced with a huge amount of cases when a seemingly working solution was launched, and the technical debt was left out completely by the client.
Businesses are focused on growing revenue and quite often forget about temporary technical decisions. Many companies will forget about the technical debt. They will start running to the next goal while today’s issues will bring many problems at a later stage and take significantly more effort.
Today we work with companies that are also in a rush to implement these rules and be among the first in the German market. But let’s not forget – being the first is great, but being the best is what makes sense in the long term.
Sergey Logvinenko is an expert in egaming domain, leading gambling direction, and managing projects inside Sigma Software, delivery and doing account management from 2008 for Boss Media, GTECH, IGT, Play’n GO, Northern Lights and other companies.