The University of Hohenheim in Stuttgart’s Gaming Research Center (Forschungsstelle Glücksspiel) has released a set of guidelines for reforming German gambling laws, including punishing unlicensed players and allowing, but narrowly regulating, online casino sports as mentioned by Igamingbusiness.com.
The position paper of the Center, released ahead of a meeting of state legislators in December, also called for the establishment of a new, federal regulatory body.
“There is agreement that the enforcement against illegal providers on the Internet needs to be strengthened,” the Centre said.
This pointed out that at present, offshore operators may circumvent any gross income or churn taxes imposed on authorized operators, or just a service sales tax. In ensuring that all gaming companies are required to pay tax, whether approved or not, the illicit players will lose a major benefit over the regulated market.
The Center highlighted the fact that in 2017, land-based casinos produced € 607 million in gross gaming revenue and charged € 319 million in casino and sales taxes. On the other side, it is reported that the illegal online trade created a maximum GGR of € 1,76 billion that same year, but only paying € 334 million in value added tax. Such companies would have been responsible to € 915 million in taxes if they had been exposed to the same taxes as their land-based equivalents.
In contrast, it stated that illicit land-based betting is still a criminal offense in Germany, but illegal online gaming is not protected by the criminal code. As such, the Code should be reworded to insure that it would include international players providing their online services, it said.
The Center added that it would be a positive for the nation to legalize and control online casino, as the games are ubiquitous but largely unregulated. The study said player protection measures such as a database of self-exclusion, gaming activity reviews and expenditure caps would help improve online casino rank.
“Currently, the offer of online casino games on the Internet is largely illegal, but still takes place. It can be assumed that some states will continue to allow online casino games or will do so in the future,” it explained. “Also, for player protection reasons, a regulated market is preferable to a non-regulated market.”
It also proposed a complete ban on casino ads, though, and said that due to the risk of cheating and abuse, poker would remain illegal.
Eventually, a regulatory body set up as an independent public body with the power to issue constitutional regulations will guarantee that owners, legislators and distributors “would be able to obtain procedural clarity in conflicts as soon as possible.”
The proposals are for a potential regulatory framework to substitute the third revised State Treaty, which was adopted earlier this year but will only function as a replacement until 30 June 2021, when a longer-term template is to be introduced.
License requests will be accepted as of January 2020 under the new treaty. Operators would, though, be limited to offering online sports betting, with no in-play, a monthly expense cap of € 1,000 levied on games, as well as a 5 percent turner fee.
The Deutsche Automatenwirtschaft (DAW) slot group and the German Sports Betting Group (DSWV) gave their own ideas for the new framework in relation to the research centre.
The DAW claimed that multiple game verticals should be permitted, and that new laws would preserve control on draw-based games on the state lottery. The DSWV, meanwhile, called for a root-and-branch overhaul of the current framework with a significantly expanded market, arguing that evidence suggests that there are no grounds to suggest that online gaming is any more dangerous than other forms of gambling.