In Germany, The Procedure Of Licensing Online Gambling Begins

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May 30, 2022
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In Germany, The Procedure of Licensing Online Gambling Begins

On july 1, 2021, an interstate gambling contract (istg) 2021 has enter into force throughout germany. It includes new licensing opportunities for sports rates, virtual slot machines and online poker for private operators. Indition, istg 2021 will include new rules for advertising. Licenseses issued in accordance with this new rule will be valid throughout germany.

Indition, a new (controversial) tax regime will be introduced for sports rates, virtual slot machines and online poker.

New istg 2021

Istg 2021 allows private operators to submit applications for licenses for placing sports rates, virtual slot machines (online modeling of ground slot machines) and online poker. Licenses will be valid for five years. Rules do not apply to online casino games. They are defined as virtual simulates of casino games (such as black jack and roulette) and direct broadcasts of land games casino with the ability to participate over the internet. The possibility of obtaining a license to play online casino is regulated by individual laws of individual federal land. Probably, lawmakers simulate laws on specifications for license to manage land casino.

Requirements for obtaining salez rates, virtual slot machines and online only on certain and differ. The main aspects of general requirements include the following:

  • Pledge: the applicant must make a deposit of at least 5 million euros. In some cases, this amount can be increased to the amount of the expected average monthly turnover (maximum 50 million euros).
  • Providing proposals for gambling online. If various bidding offers on the internet are provided through the same internet domain, the operator must provide an independent and graphically separate area for each form of gambling. The division also prohibits cross advertising. The player should not play at the same time on different sites.
  • When regisering on the website, the player must establish a monthly deposit limit in the amount no more than 1000.00 euros. Restriction applies to the player and not to the provider. This means that, as a rule, the player can spend 1000 euros per monh on all game platforms.
  • The competent authority will monitor compliance with a limit of 1000 euros through the central "limit control database". Providers should pay for connecting to the limit control database and its use.
  • As for the online rates for sports, the authorities allow greater flexiiibility than with the current mode. Rates will be allowed to the outcome of the game, as well as on the events during the game or their combination. In addition, the live rates will be allowed in accordance with the special requirements.
  • For games on virtual slot machines the minimum game time is 5 seconds, and the maximum rate is 1 euro.

Additional special rules are applied, for example, kyc for players, the rules for elimination of minors and self-slip. 

As of the end of may 2021, technical recommendations on access to the "database of limit control", the creation of a "secure server" and the creation of a "secure server", which allows the authority to monitor compliance with the requirements.

Features of the application for a license

The management of gambling business in the federal land of saxony-anhalt is becoming a competent authority for the nationwide licensing process. The body finally released special licensing conditions for virtual slot machines and online poker, which determine in more detail the general requirements arising from istg 2021. Licensing conditions do not apply to casino games such as blackjack or roulette.

Licensing conditions, in particular, cover the following:

Application format

The application must be filed in writing and additionally in electronic form by mail or by electronic loading. It should include a declaration of the compleyteness of documents, as well as the estimated costs for testing the concept of security, social and economic efficiency.

International providers

Only applicants registered in the eu and eea may apply for a license. If the beert documents are not in german, you must provide a certified copy of the original and certified translation. 

Application documents

The applicant must provide the necessary evidence and documents in support of its application. Indition, they should include, among other things, the declaration of completeness. 

Documents for verifying the reliability of the provider

Application documents must contain detailed information on the applicant and, theraefore, describe any potential internal or external influences or risks when conducting gambling. These data should include, among other things:

  • Structure of financial rights and rights of the applicant’s voting
  • Plenipotentiary representatives of the applicant
  • Application for obligation not to offer unlicensed gambling.
  • Administrative records, such as an an extract from a trade register or a certificate of admission

Documents for checking the applicant’s capacity and feedback concept 

These documents should include evidence of the applicant sufficient resources certified by an independent auditor. The auditor must confirm compliance with additional requirements, such as the division of the means of players and applicants. In addition, the applicant must provide an economic concept with a profitability forecast during the first five or seven working years.

Documents confirming the transparency of the gambling operation

These documents schald include a security concepts, as well as concepts concerning payments, it security and money laundering. In addition, these documents shold include a social concept that must inform about the measures to protect the youth and the prevention of the gaming dependence undertaken by the applicant.

Concept of distribution

The applicant must indicate whether the technical processing of the distribution will be carried out by the applicant itself or third-party service provider / platform. 

In addition, the applicant must describe its website, including hotline information for customers, language settings and data protection. Additionally, all the applicant’s brands shold be indicated. Finally, if any discounts in the distribution system are planned, they must be disclosed. 

Advertiesement

It should be specified whether the applicant will offer advertising indepenently or through external suppliers. In the latter case, you must specify information about external suppliers. The applicant must also provide a promotional concept.

Information

The applicant must describe the appropriate information on the proposed games, as well as their presentation by players. Indition, it shold be described how information about the risks of dependence, the exclusion of minors and treatment capabilities should be representd by players.

Further requirements

In addition, there are additional legal requirements, such as the obligation to provide a printout of the chief security officer (§ 38 bdsg) and t. D.

Rules for advertising

Licensed operators will be allowed to advertise their proposals in accordance with the new rules of istg 2021. Only advertising is allowed, which meets the following principles:

  • Advertising is prohibited, which motivates "not players" to participate or encourages excessive passion for gambling.
  • Advertising designed specifically vulnerable persons is prohibited. 
    Enveloping advertising is prohibited.
  • Advertising and editorial content should be divided.

Indition to these principles, there additional restictions or certiain game services or advertising forms:

  • Advertising via telephone calls, sms or similar messaging services are usually prohibited, except in cases of active contact of the framework of current active contractual relations.
  • Advertising requires the prior consent the requires the prior consentising, as well as (ii) to pre-consult an advertiser about the exclusion system.
  • Most lotteries and some forms of rates on horses are exempt from the above limitations.
  • Advertising using income distribution model, for example, using affiliate references is prohibited.
  • From 6:00 to 21:00 advertising of virtual slot machines, online poker and online casino through broadcast (for example, television / radio) or online.
  • Immediately before or during direct broadcast of sports events, advertising sports rates on this sporting event on the same broadcast channel.
  • Live broadcast of sports events should not be combined with advertising rates for sports on this sports event. An exception is the display of the current account on the bookmaker’s website.
  • Inddition, in accordance with istg 2021, active athletes or sports officials can no longer be used to advertise sports betting.
  • The general sponsorship of sports teams (for example, on t-shirts) will remain permitted.

In addition to these rules, the licensing authority may include additional requirements regarding the type and volume of advertising. This approach is intended to provide an opportunity for individual regulation based on risk assessment.

New tax regime

The new licensing mode will be accompanied by new tax provisions.

The tax on online poker and virtual slot machines will be calculated based on the cash rate less tax on the virtual slot machine (the basis of the assessment). The cash rate includes all expenses incurred by a player to participate in online poker or game on a virtual gaming machine. For online poker, which also includes all contributions for party during any game. The amount of tax is 5.3% of the calculation base.

Sport rates tax will be increased from 5% to 5.3% of the relevant tax base. Everything else remains the same.

This mode differs from the tax regulation of other eu member states and caused criticism, since the key goal of istg 2021 – send players to the adjustable market may be threatened due to relatively high taxes on the regulated market.

Source: yogonet

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