The Interstate Treaty on Gambling, Glücksspielstaatsvertrag, became effective in Germany in 2021, which presented a major turning point for the iGaming sector and its regulations.
The CDU party’s member, Daniel Hagemeier of North Rhine-Westphalia (NRW) recently highlighted the importance of the treaty in striking an equilibrium between freedom and regulation.
The users exposed to online gambling need protection since they are subject to gambling addiction given the amount of freedom they have. The main agenda of the treaty is to drive and channel online gambling in a less harmful manner without demonizing it.
2025 is expected to be vital for the German online gambling sector, as the treaty will now focus on two major areas that might that may shape the industry – Player Claims and Regulatory Challenges
Player Claims and Legal Challenges in Focus
Recently, there has been a surge in player chargeback claims which has become a major issue in the iGaming industry in Germany. Many courts in the country have witnessed an increase in player claims due to the huge litigation funding firms supporting these claims.
While most German courts generally grant the claims that players make, there are special cases where the claims are dismissed. Both the Regional Court (LG) of Erfurt and the German Federal Court of Justice (BGH) have suspended the proceedings of such cases and transferred critical legal questions to the European Court of Justice (ECJ), the questions are related to the EU law interpretation and its link with the regulations of national gambling for both casinos/slots and sportsbooks.
The expected timeline for the ECJ decisions could be late 2025 or 2026 which may have far-reaching effects. This will either strengthen the claims of hundreds and thousands of players who are seeking their refunds or provide more clarity to the legal aspects, strengthening the position of the online casinos in Germany. Till then, uncertainty will create considerable financial risk for gambling and litigation funding companies alike.
Regulatory Adjustments and the Treaty Evaluation
The Interstate Treaty on Gambling (Glücksspielstaatsvertrag) that was launched in 2021 is reaching a pivotal milestone while undergoing major evaluation.
The process has sparked debates among politicians, industry stakeholders, and regulators over the major changes introduced to the regulatory framework.
Some of the pressing issues include –
- Market Attractiveness – The German regulations regarding online gambling are currently under scrutiny. The regulations include the 1 EUR per spin stake limit for slot machines and the compulsory five-second interval between every spin. The higher administrative court Saxony-Anhalt section will ultimately handle the unaddressed concerns and will manage the disputes of several casino operators and gambling authorities, making the market more regulated and less attractive for players and pushing “players to resort to the black market”.
- Advertising Restrictions – The divide between those favoring liberalized regulations for advertising and the advocates of advertising bans is growing every day to make sure that the legal gambling market remains attractive, unlike the unregulated offshore operators.
The outcome of such debates in Germany may have a strong implication for a better future for the regulated gambling market. Failing to address the legal market attractiveness or undervaluing the existence of the black market can potentially undermine the main goals of the treaty.
