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German Online Gaming to Change in 2012

8 April 2011 by admin

This may only be the beginning of April but already Germany is looking ahead to January of 2012. This is because their current treaty for online gambling will expire on December 31, 2011. And if the current United States budget battle is any indication, governments can move very slowly when there is conflict over an issue. Granted, online gambling in Germany is not the same scale of conflict as the budget battle in the US, but the principle of slow movement when political conflict is on the table still applies.

Hence it is not surprising that German lawmakers began to tackle the issue of online gambling early in the year. Already bwin.party is concerned about the changes in the German treaty. The fear is that while the German online gambling market is opening up, it is not opening up nearly as much as bwin.party was hoping for. A financial analyst said the new German regulations “would significantly restrict the ability of bwin.party to make money in the German market.” A big part of that can be attributed to the 16.67% turnover tax the German government is imposing.

So what were these changes in the German regulation that has online gambling operators so worried about their German sectors?

First let’s look at where German online gambling is coming from, the treaty that the country is currently under for the remainder of the calendar year. As it stands there is a monopoly on the government run lottery, and this monopoly does not, of course, allow for any competition from other online gambling operators.

So coming down the road for next year is a new treaty that does open up the German online gambling market, but in a highly restrictive manner. There will only be seven licenses issued to online sport betting operators; and the number of licenses to be given to online gambling operators, while not stated, will be highly limited. And all licenses will be reviewed in five years to see whether those operators will be allowed to continue to offer their services in Germany. Also, those with licenses, while allowed to advertise in stadiums and have logos printed on sports jerseys, will not be allowed to advertise on TV.

So the new German online gambling treaty is very restrictive. And naturally the government and state run lotteries, which used to have monopoly status, are not restricted. So while the lotteries are no longer technically a monopoly, there is still a monopoly feel to the new German online gambling treaty.

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