To understand the gambling laws of Germany, you must first understand how laws are made in this country. Anything which can be described as being part of the ‘law of public order’ is decided at state level rather than by the federal government. As gambling falls into this category, technically each of the 16 states can create its own laws related to how gambling operates. In reality, however, all forms of gambling in Germany are illegal, with a few exceptions, which we will get into later. This looks like it will change in the future, but the timetable on when reforms of gambling laws will go through is not clear. For now, many German bettors operate in a grey area, but continue to be able to gamble online for the moment. There are state-owned land based casinos in Germany, and these accept bets on a wide range of typical casino games including poker, slots and traditional table games.
The main law which applied to gambling in Germany was passed on the 1st of January in 2008. This was the Interstate Treaty on Gaming, and this banned all forms of online gambling in Germany except for betting on horse-racing. This may seem like quite a Draconian law to you, and many of Germany’s EU neighbours felt exactly the same way. The European Gaming and Betting Association went to the European Commission to complain about the new laws, since they were stricter than is provided by from the European Union. In 2010 the European Court of Justice finally arrived at a verdict, and they came out on the side of the Gaming and Betting Association, ruling that the 2008 law was too strict and in violation of European laws. The judgement required that the monopoly in Germany must be liberalised and that more gambling options be provided to German residents.
The landmark judgement by the European Court of Justice led to the 2012 Interstate Treaty on Gambling (ISTG). This new law came into effect in June 2012, after a 6 month delay due to the fact that the EU Commission was not happy with the original draft of the law. The main effect of this new ISTG was to allow restricted online sports betting to local players. This is restricted due to the fact that a cap was imposed on the number of betting licences available, with a mere 20 becoming open after the law went through. This very small cap was heavily criticised by local German courts, and also by the EU Court of Justice. In 2016 the Court of Justice ruled that this was again in violation of EU laws, since it prevented the free movement of services between EU states. Under this ruling, Germany was powerless to prosecute online gambling companies which allowed German residents to bet with them.
All of this legal wrangling led to yet another gaming law being passed in Germany, this time in March of 2017. As you can tell, progress was as slow as you might expect with so many different states involved. This new law increased the number of licences to 40, which was sufficient to offer licences to the 35 international gaming companies which had already applied. However, this new cap was still seen as being too small and was not welcomed with open arms by the EU authorities. Don’t forget, all of these laws still only relate to sports betting, as online casino gaming is not permitted at all. This means that the German market is severely limited when compared to other EU countries, in terms of online gambling options.
However, one German state decided to take a different road to the others. The state of Schleswig-Holstein opted out of the 2012 Treaty, and instead decided to implement its own - much more liberal - gambling laws. They promptly issued gaming licences to 36 international gaming companies which included PokerStars and 888. There was a dream to make this state - home to about 3% of the German population - into a Germanic version of Las Vegas. This did not last long though, as a change in state government the next year resulted in a change in policy, and no more licences were given out. Luckily, those that got the initial licences were allowed to keep them for 6 years, meaning that they could still legally operate out of Germany and allow online gambling to those based in Schleswig-Holstein.
So the situation in Germany regarding online gambling is still somewhat uncertain. No international online gambling sites can get a German licence, except for those that managed to get a Schleswig-Holstein licence, plus the 40 who applied for sports betting licences. The EU is not happy with German laws relating to online gambling, and is pushing for them to be made more liberal. And where does this leave online gamblers in Germany? Well basically they are playing online using international gambling sites based offshore. While the law could be read to make betting online like this an illegal activity, in reality no German has ever been prosecuted for making such wagers. International online casinos and other betting sites are not constrained by German law, and so they can accept German players and are more than happy to do so. In fact online gambling is hugely popular in Germany, and the government is just missing out on the potential tax revenue by not allowing more licences to be obtained by these international providers.
The way that online gambling is regulated in Germany is in a state of some flux, and will not be sustainable over the long term. Germans are spending their euros betting on international casinos based in territories like Malta and Gibraltar, and the German economy is not benefitting from this activity at all. This is fine for the German punters, except for the fact that should they have a problem with an online betting site they have no legal way to take action, and for that reason they need to be careful to play only with the most trusted sites. For now a situation exists which is not the best for either the people or government of Germany, and a change in online gambling laws is certainly overdue.