GVC Warns Germany’s New Gambling Law Will Drive Customers to Black Market Alternatives
Gambling operator GVC Holdings said it believes Germany’s new online gambling law, slated to take effect July 2021, is inconsistent with EU directives, and warned that the many restrictions it contains will prompt customers to seek black market alternatives.
In a lengthy article recently published on Politico.eu, GVC Director of Regulatory Affairs Martin Lycka dwelt on why he believes Germany’s new online casino and sports betting regulatory framework is ineffective and unnecessarily restrictive from the perspective of player protection.
The heads of Germany’s 16 states this spring agreed on a regulatory framework that would reorganize the local online gambling market to permit the provision of online casino and sports betting services. Under the Third State Treaty on Gambling, which took effect in January and will remain effective until mid-2021, only digital sports betting activities are permitted in the country.
According to GVC’s Regulatory Affairs Director, the framework that will be implemented from mid-2021 comprises compromise regulations between the 16 states, which states “include opponents of private gambling markets.”
In his recent Politico article, Mr. Lycka noted that the proposed online gambling law contains a number of restrictions on the design and advertising of digital gaming and wagering projects that are “neither effective nor necessary” from player protection perspective.
The regulatory compliance expert believes that these restrictions would instead create a “wholly unfulfilling gaming experience” and would prove to be “counterproductive to their stated aim of channeling players towards licensed and legal providers.”
A Highly Restrictive Regime
Some of the measures proposed in Germany’s yet-to-be-implemented law include a ban on live streaming of sporting events on wagering websites, a one-minute delay for customers when they switch between different products on the same Internet domain and a five-minute delay when they switch between different gambling sites, and a €1 limit on online slots stakes.
In addition, licensed online gambling operators will not be able to advertise their products on radio and the Internet between 6 am and 9 pm.
In-play betting, one of the most popular types of digital wagering, would be limited to the final score and associated markets.
According to Mr. Lycka, locally licensed products will be “much less attractive and less competitive than their unlicensed counterparts”, if all these restrictions take force next year. This will prompt customers to seek black market alternatives, but the GVC Regulatory Affairs Director warned that the unregulated space offers “zero responsibility, zero protection, and zero tax being paid.”
European Commission Yet to Rule on Draft Law
The European Commission is yet to review and rule on Germany’s proposed new gambling law. According to Mr. Lycka, the measures listed in the draft law are inconsistent with EU directives.
In his article, he paid special attention to requirements for “extensive storage of data” included in the new law. Under these requirements, operators will have to store data about all player deposits and information on the prevention of parallel play across operators.
However, Mr. Lycka warns that sharing of such data “could constitute a breach of data protection rules” and that under EU laws “the processing of such personal data must be ‘limited to what is absolutely necessary.’”
The European Commission has previously been critical of earlier versions of Germany’s gambling law, and GVC’s Regulatory Affairs Director expects it to once again lodge criticism of many aspects of the latest draft law.
Mr. Lycka urged German lawmakers to work closely with the European Commission and craft together “a safe, user-friendly and attractive gaming sector.”