GVC Holdings warns of ‘misguided and counterproductive’ German proposals

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Further warnings have been issued to Germany regarding restrictions to be imposed as part of new gaming laws, with Martin Lycka, director of regulatory affairs at GVC Holdings, cautioning on a potential black market uptake on Politico.EU.

After the European Gaming and Betting Association called on policymakers in Germany to simplify the country’s complicated framework last month, Lycka warns that in terms of player protection “many of these requirements are neither effective nor necessary”.

Formed as a result of a treaty between Germany’s federal states, from July 2021 regulation will come into force that will allow the registration of an unlimited number of sports betting providers, virtual slot machines and online poker games, as well as permitting a limited number of online casino game providers.

Restrictions pinpointed by Lycka in his Politico column include a ban of live streaming on betting sites and no commercial advertising on radio and internet for virtual slot machines, online poker and casino games between 6am and 9pm.

Furthermore, a one-minute delay for customers when they switch between different games on the same internet domain, such as from sports betting to virtual slot machines, is also stipulated, as well as a five-minute delay when switching between different gambling sites, a €1 stake limit on virtual slot machines and in-play sports betting limited to the final score and associated markets; however, this situation is said to remain unclear.

“Due to the many restrictions surrounding the new rules, licensed products will be much less attractive and less competitive than their unlicensed counterparts. There is, therefore, a huge risk that customers will move to the black market, where there is zero responsibility, zero protection and zero tax being paid,” Lycka writes. 

“This risk is compounded by some of the hardliners among the federal states, who have sought to impede legitimate operators and payment service providers. The federal state of Lower Saxony, for example, has asked various payment providers to block customer payments to operators of online services such as poker or casinos.

“Regional inconsistency is inevitable for online casino table games. The 16 German states will be free to prohibit such products entirely or impose limits, either unilaterally or in tandem with other states. Given the limited number of concessions that may be permissible, monopolies or oligopolies will likely form. 

“Clearly, this means an unlevel playing field and is, therefore, highly questionable under EU law. This also contrasts with the legislation’s provisions for virtual slot machines, online poker and online sports betting, which can be offered nationwide in an open permit model.

“There is, therefore, a huge risk that customers will move to the black market, where there is zero responsibility, zero protection and zero tax being paid.”