Europe’s biggest economy has finally regulated the field of online gambling. The new set of laws finally has power, and from what we can see, the field seems quite regulated. However, even though it’s still early for conclusions, some of the issues can already be seen. The main problem lies in the regulation of games and certain restrictions, which may negatively affect the playing experience. In other words, many believe that the new regulations will force players to turn to the black market. We’ve also seen examples of casinos such as Unibet has left the market.
The main issue with the new regulations is that there are some restrictions regarding design and advertising. According to the lawmaker, the goal was to make a kind compromise with state authorities.
We have no doubt that these regulations make sense in terms of legal security and harmonization, but from the player’s perspective, they simply don’t look right. These restrictions have a negative effect on users and their experience.
Let’s take some of the most interesting restrictions:
- Live streaming is banned on betting websites
- Advertising is banned between 6 AM and 9 PM for virtual slot machines, online poker, and casino games
- One-minute delay is required for customers who are switching between different games on the same website, and a five-minute delay when switching between different casino websites
- Limits on maximum bonus casino can offer
- Stake is limited to €1 on virtual slot machines
In order to gain the federal license, online casinos will have to meet these demands, and while that may not seem all that bad by itself, it puts licensed operators in a kind of inferior position compared to unlicensed casinos.
Furthermore, federal states have the authority to ban certain products, which means that even though they’ve gained the licenses, online casinos may not be able to offer their service across the whole territory.
All this could lead to one thing – players will rather choose unlicensed online casinos that do their business on the black market. Simply, licensed operators won’t be able to keep the pace in terms of the quality of services, and many players will choose unlicensed ones, even though they won’t have protection. For states, this leads to lower tax incomes from gambling, which is another potential issue.
Another problematic thing about the new law is that it requires comprehensive storage of data. In other words, central authorities and operators will share details about player deposits and all kinds of other data. Even though the intention of the lawmaker was to prevent things like parallel play across providers, this directly leads to violation of data protection rules.
So, the data of all players will be recorded, without any special requirement, such as problematic gambling behavior. Of course, some form of tracking is necessary, but the problem here is that there is no distinction between addicted and non-addicted players, for example. As a result, the authorities will track not just problem gamblers, but those who wager only occasionally as well. According to most experts, this is a direct and very serious violation of fundamental rights.
What we can conclude from all of this is that despite the new law is a big step forward in terms of online betting regulation, there are some parts that should be revised. Simply, they are not compatible with EU laws, nor with basic principles of human rights.
We expect the German Commission to review all the parts of the Act that seem critical and make required corrections. We presume that all the counterproductive measurements will be dropped and that Germany will follow the path of countries like Denmark or Italy, which are in accordance with EU laws and which practice an open permit model that allows online casinos to be more competitive.