With its current online gambling regulations nearing expiration, the government of the German state of Schleswig-Holstein has been able to secure a stay of action regarding its legal online gambling activities from the German federal government. The new expiration date has been set at June of 2021. This was big news for a group of very nervous European online gambling providers that have been dealing with mounting uncertainty.
Over the last seven years, the German government has been working with the leaders of all 16 German states to hammer out an Interstate Treaty on Gambling. Ultimately, any online gambling treaty between German states will require the European Union’s approval. This approval must take place before Schleswig-Holstein or any other German state will be permitted to offer its residents legal access to sports betting sites originating out of the UK. It’s worth noting that under the current proposed versions of the Interstate Treaty, German residents would only be permitted to bet on sports with no other access to any other forms of online gambling. That means no legal access to online poker sites, horse racing websites, online casinos or online bingo sites, which ultimately means no access to any kind of casino promo code or other type of bonus promotion.
If and when the EU does approve an Interstate Treaty from the German government, new provisions will immediately go into place in the form of federal guidelines for online sports gambling. The prohibition on all other forms of online gambling will also go into effect at the same time. Other provisions under the new federal guidelines could include a cap on the number of licensed online sports books (though any proposed cap would likely be disputed) that will be permitted to operate in all 16 German states and a proposed effective tax rate on revenue turnover of 5%.
Support for Current Legislation Under the Schleswig-Holstein
Regardless of what transpires over the next two years while the German government works out the details on the Treaty, Schleswig-Holstein residents will be able to continue gambling legally through licensed online casinos, poker rooms and online bookmakers. Under the Schleswig-Holstein group’s new temporary guidelines (established by a new bill), current licensed online gambling providers will have their licenses extended until mid-2021. At the same time, the effective tax rate charged to providers will stay at 20% of turnover and remain in effect also until at least June 30, 2021.
This is all good news to the state’s Minister for Home Affairs, Hans-Joachim Grote. From his perspective, he wants to see all 16 states support new federal online gambling regulations in order to stop the influx of black-market online gambling access. He believes the German government has a duty to protect residents of each state, particularly young people, from the risks associated with unregulated gambling. Essentially, he sees the Treaty with EU approval as an opportunity for the German government to bring gambling out of the proverbial backroom and into the mainstream where residents will get protection while online gambling providers will be subject to taxation.