The State of Online Gambling Legislation in Germany

Like most European nations, Germany has always enjoyed a love affair with gambling. And although the popularity of gambling waned in the country in much of the 20th century as a result of war, recession and division, in the last decade or so gambling has made a big comeback, and there are currently around 70 licensed and regulated casinos across Germany. In terms of gambling laws, local German authorities were given the power to regulate gambling in their regions as they saw fit. However, that seems to have changed as gambling, and more recently online gambling, legislation has become a matter for the central German government.

While some European countries - like the UK - chose to legalize, regulate and tax online gambling to help prevent underage and problem gambling, Germany went the route of trying to ban the popular internet activity by ordering its ISPs to 'block' access to offshore online gambling websites as well as by ordering German banks and financial institutions to stop processing online gambling-related payments. This action has drawn much criticism from the online gambling industry, as well the European Commission (EC), which is reportedly contemplating taking legal action against Germany for flouting EU online gambling free trade agreements.

However, as the ban has been hard to enforce, the majority of German online gambling fans - an estimated 2.2 million of them - have continued to gamble online via offshore gambling sites. This means hundreds of millions of Euros are streaming out of Germany, online gambling revenues that Germany could easily tax if it took a more forward-thinking approach to online gambling instead of sticking to its 'prohibition' stance. The EC contends that Germany's Interstate Treaty on Gambling - which restricts the rights of offshore online gambling operators from offering their services to German online gamblers - contravenes European Union law under Article 49 of the Treaty of Rome.

But there is a hope that when Germany's current state treaty on gambling expires on January 1, 2012, that its online gambling market will be liberalised, at least in some sectors, to bring it more in line with other EU countries that have embraced legalized and regulated online gambling.

 Posted by Anton Johan at 11:00 on 25 January 2010