From a bird’s eye view, the interaction of regulations, responsibilities and transitional tasks in Germany appears like a thicket of impenetrable information. A chronological view seems appropriate.
While regulatory oversight had previously been centred at the Regional Council in Darmstadt, Hesse, the Federal State Administration Office of Halle in Saxony-Anhalt (‘LVA’) assumed responsibility for licensing poker and slots for the first time on 1 July 2021, and on a transitional basis. Until 30 June 2022, payment blocking was handled by the Ministry of the Interior in Lower Saxony. IP blocking, which was introduced with the IST 2021, lay upon the LVA until 30 June 2022.
The LVA’s competency is transitional because the Interstate Treaty on Gambling (‘IST 2021’) also allows a new authority to enter the scene: the Joint Gambling Authority of the Federal States (‘Gemeinsame Glücksspielbehörde der Länder’, short: ‘GGL’), seated in Halle.
The transition of tasks occurs in stages. Accordingly the GGL has been dealing with enforcement and supervisory measures since July 1, 2022. Subsequently, from January 2023, the responsibility for licensing will be transferred to the GGL. Time will tell how the handover of the still-pending proceedings will be executed and whether it might cause any delays.
The LVA has reportedly monitored more than 800 websites and detected approximately 150 cases of illegal gambling. Additionally, 90 cases of advertising for illegal gambling were reviewed, letters of notification were sent out and administrative proceedings initiated. Criminal charges were filed in 25 cases of illegal gambling.
Now, the responsibility for combatting illegal gambling and advertising rests entirely with the GGL. The most important tools for the purpose of enforcement are IP blocking and payment blocking. Fines and prohibitions can also be issued. Within its first few weeks of competency, the GGL has already initiated two administrative proceedings, targeting the Lottoland and Lottohelden brands. Internet providers have been requested to block both domains. Offering so-called secondary lotteries, as the operators in question are accused of doing, is strictly prohibited in Germany.
Furthermore, this measure, its rollout and approach clearly show the tone the GGL wants to take and where its priorities are likely to lie. Co-chair Benjamin Schwanke explained: “We will remove players from the market who do not comply with the rules of the Interstate Treaty on Gambling, have not applied for a licence or have been rejected. Criteria for prioritisation in enforcement include market size, awareness and advertising behaviour/volumes.” The GGL also intends to establish a dedicated public prosecutor’s office in Halle, targeting illegal gambling. In addition, the tax authorities are to be involved. Ultimately, tax liabilities have negative consequences on both national and foreign licensing procedures. Illegal gambling is thus to be made more and more of an unprofitable, obstructive business model.
At the head of the GGL are two bodies. One of which is the board of directors (‘Vorstand’), which consists of two members who are intended to manage the institution and represent it. In addition, there is the management board (‘Verwaltungsrat’), which in turn consists of representatives of the federal states. Its task is to control the board of directors. Below these two bodies, around 110 employees are expected to make up the administrative department, which is made up of gambling law experts, gambling addiction researchers and IT experts. Its responsibility will be the implementation of the regulatory tasks in detail. While the effective enforcement of the regulations for the purpose of channelling may be highly commendable, the announcement by the GGL board that it would also threaten to impose coercive fines of up to €500 ($511), to implement the IP blocks, generated criticism from internet providers and politicians alike.
The plans put forward as an offer of cooperation, namely that internet providers should implement IP blocks immediately without prior administrative proceedings at the call of the GGL, were largely met with rejection on the part of the providers. In the aftermath, political representatives also pointed out that such network blocks should continue to be understood as an ‘ultima ratio.’ In addition, fines of the aforementioned amount can only be imposed on the basis of IST 2021, i.e. on gambling operators themselves – but not on the internet providers.
