Germany’s Newly Inaugurated Gaming Regulator Issues First Fine

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Posted on: March 16, 2023, 08:02h. 

Last updated on: March 16, 2023, 11:20h.

For the first time in its brief history, Germany’s Gemeinsamen Glücksspielbehörde der Länder (GGL) has imposed a fine on a gaming operator. The new German gaming regulator, which began operations at the beginning of the year, immediately got to work implementing and enforcing unified rules for the gaming industry.

Ronald Benter (left) and Benjamin Schwanke cut the ribbon for the official opening of the authority of the GGL
Ronald Benter (left) and Benjamin Schwanke cut the ribbon for the official opening of the authority of the GGL. The regulator has issued its first fine since taking over in January. (Image: Mitteldeutsche Zeitung)

The GGL said in its notice about the violation that the unidentified company had violated advertising rules. It promoted its products on websites that also promote offshore operators, which violates the standing State Treaty on Gambling.

The regulator said it issued a five-figure fine to the company for the violation. As it did with the name of the operator, the regulator didn’t specify the exact amount of the fine.

Deliberate Intent

The GGL said that the operator “deliberately” promoted its activities on different websites that also promote unlicensed options. In Germany, legal providers cannot place advertisements on websites that also contain advertisements for unlicensed providers. This is a part of Germany’s new  GlücksspielNeuregulierungStaatsVerag, the state gambling treaty that entered into force on July 1, 2021.

After the introduction of the new laws, online casinos in Germany can only operate if they have a license. This has led to several lawsuits against operators, including PokerStars, with players suing to recover their losses when the operator acted illegally in the country.

As a result of the willful violation, the GGL hit the operator with a fine of at least €10,000 (US$10,622). When announcing the fine, CEO Ronald Benter warned that the regulator will “impose heavy fines for violations” and possibly withdraw the licenses of repeat offenders.

The regulator also pointed out that players can check the GGL’s official listing to see which online providers have a license. This way, they know for sure that they’re using only those providers that provide the required protection and risk management the GGL prescribes.

Germany has been busy approving new online gaming licenses over the past year, with another push having arrived in January. However, with less than 12 months of activity, it’s still too early to determine if the new unified regulated online market will be effective.

GGL Questions Black Market Claims

There have been reports that a lack of progress in Germany’s online gaming introduction is leading to an increase in the use of black market alternatives. DSWV, a trade group representing Germany’s sports betting space, recently reported that there has been a “significant decline” in participation in the regulated segment.

Fueling this transition are the new gaming rules, which the DSWV asserts are overly restrictive. The GGL denies the claims.

Benter asserts that, according to GGL analysis, “less than 5%” of sports bets occur in the unregulated space. He based the figure, in part, on tax data provided by the Federal Ministry of Finance.

Except, many who use offshore options don’t pay taxes on their winnings. Therefore, it would be improbable and more than a little difficult to put a number on the number of wagers taking place on unregulated platforms.

A court judge has already ruled that ISPs don’t have to block access to certain gaming websites, making it easier for consumers to play offshore. In addition, there’s nothing preventing the use of a VPN to bypass geolocation and other restrictions.

There are reportedly more than 400 unlicensed gaming sites targeting the German market. And, with no long-running online gambling revenue to track, it’s impossible to accurately determine the rise or fall of offshore revenue.

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