New Sports Betting Regulation In Germany, Will It Work?

The regulation of sports betting has been failing for years. Now the federal states want to combat wild growth with quality requirements.

Throughout the world, we have seen the rise of online gaming, casinos, and sports betting. In Indonesia, sites like are regulated by local government units as guided by the federal constitution of the country.

Meanwhile, in Germany, the prime ministers of the federal states are now making a new attempt at regulation. At the prime ministerial conference next Thursday they want to make a fundamental decision. According to this, competition providers can be licensed if they fulfill certain conditions with regard to their reliability, data protection, protection of minors, and protection against money laundering. Hessen would again take the lead in nationwide licensing. The last attempt by the federal states to limit the number of licenses to 20 failed in court.

Fighting uncontrolled growth was a drama that lasted for years

Last but not least, the state lottery companies and the sports, social and cultural associations that have benefited from the proceeds have suffered wild growth in recent years. The State GmbHs continue to make decent sales with Lotto, which has been in Germany since 1955, and with the Eurojackpot introduced in 2012. But their attempt to participate in the lucrative sports betting market with the Oddset, founded in 1999, has been overtaken by the reality of the online world.

The lottery companies are actually rooted in sport. After the war, only soccer toto could be typed there. But Toto now only plays a tiny role. And Oddset is not making any progress either.

It started in 2006 when the Federal Constitutional Court shook the state’s monopoly on gaming and set conditions. The limitation to state providers should only be continued if the monopoly is “consistently aligned with the aim of combating addiction risks”, the Karlsruhe judges demanded. They gave the legislature time until the end of 2007 for a new regulation.

New attempt: Now it’s about quality

Since then, the lottery companies have significantly expanded their activities against gambling addiction. But politically and legally, the topic of sports betting was only moderately successful.

Seven years ago, the federal states agreed on a state treaty stating that no more than 20 concessions were to be given to sports betting providers. The Hessian Ministry of the Interior was commissioned to regulate this for all countries.

In September 2014, the Hesse Interior Minister Peter Beuth (CDU) granted licenses to 20 companies, including the branch of the state lottery companies. Another 20 or so companies were left empty-handed, including the industry giant Tipico. All rejected applicants went to court – with success. In October 2015, the Hessian Administrative Court banned the awarding of licenses under the State Treaty on Gambling from 2012.

The federal states started the next attempt a year later. They decided to award concessions “based on minimum quality standards” alone. There should no longer be a limit of only 20 providers.

The prime ministers now have the relevant legislation. It bears a name that fits in length with the escalating dispute: third amendment gaming treaty. Hesse would then remain responsible for the implementation, more precisely: the Darmstadt regional council.

Qualitative Permit Procedure

This state treaty would introduce a “qualitative permit procedure”, says a spokesman for Hesse’s Minister of the Interior Peter Beuth (CDU).

The private betting providers, which have joined together in the German Sports Betting Association, see “a small but not sufficient step to regulate the German sports betting market”. Association president Mathias Dahms believes that further liberalization is necessary.

So it is “out of date” to continue to prohibit that the outcome of a game can be continuously tapped. This is particularly dangerous for addicts. However, Dahms complains that this “popular live bet” accounts for “about 60 to 70 percent” of the market. It would be pushed into the uncontrolled black market if the ban remained. “The prime ministers had done such a disservice to the protection of children and young people,” said the lobbyist of the betting provider.

The political dispute has not been resolved anyway. The prime ministers also advise on how online casinos are to be regulated in the future. Hessen is already threatening to go it alone if the federal states cannot agree on it. Then, according to the ministry of Beuth, “Hesse would be ready to create its own state law from 2021”.