EGBA: Don’t let overly restrictive measures jeopardise Germany’s new gambling regulations
As the discussions on Germany’s future online gambling regulations continue, the European Gaming and Betting Association (EGBA) has outlined several recommendations aimed at improving the proposals for a Third State Treaty on gambling, ahead of a stakeholder meeting organised by the North Westphalia regional government tomorrow (19 February).
EGBA welcomes progress towards developing a new online gambling regulation but warns that the draft treaty proposals are inconsistent, overly restrictive in the context of current consumer demand, and jeopardise the task of developing a fully functioning online gambling market in Germany.
“A new online gambling regulation is badly needed in Germany, but these new proposals could make the current regulatory dysfunction even worse. An attractive product offer is absolutely essential to achieving a safe and well-channelled gambling environment – but the proposed restrictions would prevent this.” – Maarten Haijer, Secretary General.
New online regulation is badly needed
Germany has a fragmented and restrictive (e.g. online casino is prohibited) gambling offer compared to other EU member states and this has made it more desirable for Germans to play on offshore websites. In 2017, the Düsseldorf Institute for Competition Economics (DICE) calculated that Germany had a “channelling” rate of only 1.8% (e.g. 1.8% of online gambling activity in Germany took place within the regulated/licensed environment), compared to 95% in UK and 90% in Denmark. A new online gambling regulation is therefore badly needed, and its priority must be effective channelling which ensures tax revenue for the German state, better consumer protection for German consumers and a working market for the online gambling companies who have a license to provide their services in Germany.
Consumer choice – not restrictions – will determine the success of the new regulation
Given the importance of channelling, consumer choice and the “shop-around” nature of online betting, EGBA is concerned that the restrictions proposed in the new state treaty will undermine the success of the future online gambling regulation. Specifically, the cumulative effects of the current product restrictions and the comprehensively restricted access to online casino games, which has been part of the European Commission’s repeated criticism of Germany’s gambling regulations.
To ensure this new regulation is a success, EGBA makes the following recommendations:
- Online casino: A full product range is essential to support effective channelling; there should be no opt-out for the Länder when it comes to the regulation of casino games.
- Bet types: Extensive restrictions should be avoided when defining permissible bet types. Any restrictions on live betting would undermine the objective of channelling consumers as it is a very popular and sought-after product, e.g. in 2018, EGBA members derived 63% of their EU sports betting revenue from live betting.
- Deposit limits: A mandatory cross-provider deposit limit of EUR 1,000 – applicable to customers across all gambling companies – will be difficult to implement on a technical level and raises concerns about data protection. A recent study found that the setting of voluntary deposit limits is effective and gamblers who set their own deposit limits would spend significantly less money, compared to players who had not.
- Player account activity: The proposed waiting times for switching between products and operators are not justified and will undermine channelling because they ignore the “shop-around” nature of online betting behaviour and the nature of price and odds comparisons.
- Regulatory authority: EGBA welcomes the proposal to set up a central competent regulatory authority but has concerns about how long it will take to set up and how this could affect licensing decisions.