New study suggests the German State Treaty could increase offshore betting

Posted on June 10, 2021

A new study from the Handelsblatt Research Institute on behalf of the online trade body Eco has found that the restrictions put in place by the new German State Treaty could force players out of the nationally regulated market to unlicenced markets with poor player protection.

The German State Treaty

The German State Treaty or Glücksspielneuregulierungstaatsverag (GlüNeuRStV) will expand Germany’s nationwide igaming offerings beyond online betting to online casino games. This establishes a new federal regime for the country that had previously left the betting legislation up to the local state parliaments. This will have some serious and long-lasting effects on the online betting and gambling industry in Germany as all states will be obligated to follow its terms until the 31st of December 2028.

This adds new online betting and gambling options, the GlüNeuRStV legalises online poker and slots for all eligible operators. Online slots and poker will face a 5.3% turnover tax, slots will be restricted to a €1 stake limit per spin, with a spin speed average of 5 seconds, and live online sports betting will be restricted to bets on the final result or next scorer.

The effect on the average bettor and betting site

The new tax rates introduced by the German State Treaty as well as the changes to the style of betting, like the slots restrictions and the spin speed, may push German bettors towards sites that offer services that they prefer. These sites will have to operate outside of Germany and will therefore not be covered by the state’s player protections.

The report states that the restrictive new regulations that may force players away from German betting sites could also harm the government’s chances at introducing further legislation when the terms of the treaty end in 2028.

There are plenty of great betting sites that operate internationally as well as having a Germany specific site. Check out our Betway review for an example of one such operator. The new legislation will not affect their bottom line significantly, the real issue comes from the smaller national and state specific betting and gambling sites. They might not be able to compete with larger international sites that can offer better betting and gambling options.

Comment from the organisations

Professor Dr. Bert Rürup, president of the Handelsblatt Research Institute spoke about the findings of their study:

“Our data show that the majority of players in online casinos react very sensitively to changes in gaming conditions. This means that if the playing conditions on the online casino site they have been playing on change, for example, in the form of poorer chances of winning, lower betting limits, or lower gaming speeds, over 40 percent of online casino players would look for an offer in which the playing conditions have not deteriorated.”

Professor Michael Rotert, Eco honorary president gave his own suggestions about what could be done to deal with the perceived issue of player retention:

“A sensible regulation that enables state control involves opening up the online gambling market to licensed providers who are under state control. This must not be jeopardized by taxation plans, excessive data collections, and restrictive regulations, because this survey also confirmed how important the protection of personal data is to people.”

The future of the treaty

This new treaty is not a long-term solution, in reality, it serves as a way to provide the German people with an increased sense of legal protection as well as increase their tax revenue through state-regulated gambling outfits. There is still a serious amount of uncertainty around the legislation and their more restrictive control and taxation could force players out of local betting options.

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Andrew Boggs

Andrew is a Northern Ireland based journalist with a background in esports and VR reporting. He grew up in County Down, Northern Ireland, and graduated from Ulster University with a Masters's degree in Journalism.

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