Illegal Online Betting: How the State favors the gambling boom

Those who bet online in Germany usually do that illegally. A new law should create legal offers at least for sports betting - can this succeed?

Little time? At the end of the text there is a summary.

When Tobias K. wants to play again, a signature is enough. Was he still addicted to it? No, of course not, short code underneath, onward bets. K. has been through it once before: place online sports bets, first for 100 euros, then for 500, later for 1000 euros as a standard bet. The big love and the apartment lose, accumulating debts of 28,000 euros within half a year.

But then he won - with a bet free of debt. K. conquered girlfriend and apartment back, made a therapy, was put on the blacklist of all known bookmakers. A year later the relapse: "I just had to sign the paper, then they unlocked my account again," says K. "That can not be!" What is going wrong?

According to the current legislation, even the existence of the blacklist is itself a generosity of the provider - because the federal states have so far failed in a nationwide regulation of the online gambling market. Except for the state bookmaker Oddset and the state lotteries, the offers are illegal, but tolerated. This means: There are no mandatory requirements for player protection, taxes only pay the sports betting provider - five cents per set euro.

The Kieler Sonderweg

Legal offers only existed in Schleswig-Holstein: in 2011, the Länder introduced a gambling law that would allow limited sports betting but prohibits online casinos. The black-yellow state government in Kiel rejected the ban, created its own law and awarded licenses.

imago / Steffen Kuttner

Sports betting in the 2nd Bundesliga

After a change of government in 2013, the country still joined the current gambling law. The granted licenses for online casinos and sports betting were still valid for six years, five weeks ago was the last. With a transitional arrangement, the state government now allows eight of the original 25 licensed companies to offer sports betting.

However, the Kieler Sonderweg only applies in the country itself. In the rest of Germany, providers refer to licenses from tax havens such as Malta, Gibraltar or the Isle of Man. "I did not realize that I play illegally," says K. For the consumer on the website, the difference is not visible.

Legal game is hardly possible

For the providers, the online business is worthwhile: The Research Center Gambling at the University of Hohenheim estimates the turnover of illegal sports bets at about seven billion euros per year, that of unauthorized online casinos and lotteries even more than 50 billion euros. About 83 percent of the market operate according to the researchers in the tolerated illegality. The head of the research center, Professor Tilman Becker, says: "Germany is a paradise for illegal gambling."

Even if the providers of casino games and sports betting wanted to become legal, they currently have no way of doing so. Several attempts to regulate and legalize the areas have failed:

  • In the first reform of the State Treaty on Gambling, the countries agreed in 2012 on an experimental phase for sports betting. 20 private providers were to receive a license for seven years. Nearly 80 providers applied to the Europe-wide tender, after a preselection still remained 35 left. But after the final list was settled, competitors complained about the opaque selection. The licensing failed.
  • With the beginning of the year 2018, a second reform of the Gambling Act should come into force, with the limit to 20 sports betting licenses should be eliminated - but even this was nothing. Schleswig-Holstein and North Rhine-Westphalia refused ratification because the reform ignored online casinos.

A legally legal offer is therefore not possible. The European Court of Justice has ruled in such cases that operators should not be punished for their activities.

Countries want to legalize sports betting

At the Prime Ministers' Conference on 21 March, the countries now want to agree on a minimum consensus for sports betting - provided that nobody jumps off. According to this, all providers who adhere to basic rules of protection of players and minors should receive a permit from 1 January 2020.

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This is how minors should be prevented from playing; Also, the stake should amount to a maximum of 1000 euros a month. Live betting, for example on the next goal or the winner of the first half in football, would be banned.

Also sports betting providers should no longer pass on casino games. The are not overlooked at large providers such as and so far. Whether the providers will give up this important part of their business is questionable.

By 2021, countries must decide on online casinos

For example, Bwin continues to offer games on the Schleswig-Holstein branch of its website - even though the country-licensed online casino games license has expired. For this, Bwin gets backing from the Ministry of the Interior in Kiel: This explains on demand, the offer would be tolerated in the sense of "voter will" - because the state government is planning a legislative initiative to extend the expired licenses for online casinos.

Researcher Becker sees this critically. He demands: "Countries should finally set up a nationwide Gambling Commission, which is sufficiently equipped to control the market before they consider licensing." Everything else is merely an official toleration of the illegal offer. So also the planned regulation for sports bets.

That would only apply until the end of June 2021 anyway - then expires the State Gambling Treaty. Until then, countries need not only agree on the regulation of sports betting and lotteries, but also decide on the future of online casinos. The negotiations have begun.

In summary: The gambling industry has been unregulated for years - because the federal states can not agree. Therefore, the Internet market is booming for illegal casino games and unauthorized sports betting. The countries currently advise on a minimum consensus: Any provider who adheres to basic rules on player protection should be legalized. That is controversial.