Germany's Gambling Story
The current climate for gambling in Germany is a very exciting one but one with its own set of problems. There has been quite a shift in where people are gambling. Whereas many individuals relied upon brick and mortar establishments in the past, 2019 is the year when we will see a revenues from online gambling climb higher than ever.
By contrast, in the last 100 years, gambling was not popular in Germany. Today it is very popular. Recent news has indicated that Germany’s strict prohibition and refusal to honor online casino operators from outside of Germany has been found to be illegal. 2019 should be a major turning point and possible upheaval with the gambling climate in this nation of 80 + million people living there.
Currently there are fifty or more land based casinos scattered about the country with every major city boasting at least one casino. Like many nations of the world, Germany is divided up into states and each state has an independent set of laws that govern the local casinos. Land based gambling has also been legal in Germany for a long time. Currently they are regulated by local state authorities with an oversight by the German Government.
Online gambling in Germany, is relatively new, and since its inception has been surrounded by a complicated set of changing laws. The picture today as to what is legal and what is not remains muddled. However, both land-based and online gambling are proving to be extremely popular with Germans.
Where The Law Stands
Prior to 2008, whatever online gambling existed in Germany was largely unregulated. Then, on 1/1/08, the Interstate Gambling Treaty (IGT) took effect, placing a complete ban on all forms of online gambling, including poker. To enforce the law, German banks and internet access providers were forbidden from doing business with online gambling providers. Stiff penalties (i.e., jail time) could be imposed for non-compliance, although there is no evidence of that ever actually happening.
The intent of the 2008 laws was to reduce the likelihood of gambling addiction, internet fraud, and other criminal activity. But the European Union (EU) intervened to disallow the complete online gambling ban, so the Government amended the IGT in 2012 to allow online lotteries and sports betting, although most forms of online gambling, including poker, were still prohibited.
All of the federal states went along with the IGT, except Schleswig-Holstein, which independently licensed its own online operators under a much more liberal set of regulations. By January, 2013, Schleswig-Holstein had issued approximately 50 online licenses, some of which were for poker games. The licenses are deemed valid for 6 years, and the licensed casinos are required to pay a 20% gross revenue tax.
Accordingly, Casino-Deutschland, the first legal German online casino was launched In May 2013, operating with one of those Schleswig-Holstein licenses. But back in January, the Schleswig-Holstein Parliament voted to revoke its own set of laws and join all of the other German federal states in signing the IGT.
Meanwhile, the operators who had already received licenses from Schleswig-Holstein were still allowed to keep and continue operating under those licenses, which are not set to expire until 2018. New operators could only receive licenses under the more restrictive IGT terms, however.
Gambling in Germany Today
The German gaming industry’s reported gross gaming revenue (GGR) is EUR 16 billion. This figure indicates a moderate gain following a post-recession decline. The majority of revenue from gambling in Germany comes primarily from sport’s betting and lotteries which eats up almost 50% of the total revenue.
Good news for the German player they do not have to pay taxes on their revenue, however casinos and gambling operators pay a very hefty fee on gross revenues.
German casinos offer all the standard games such as slots, roulette, blackjack, and craps, and some of the larger casinos also offer poker. But what is strikingly absent is the glitz and glamor of the Las Vegas mega resorts.
People go there strictly to gamble, not for other diversions like high-end shopping and entertainment. In fact, only one German casino, the Spielbank Stuttgart, is located in an entertainment center. While many of the casinos in Germany are run by private contractors, all of them are state owned and operated.
The atmosphere in these casinos is more formal than what is typically found in many other countries. Almost all of the German casinos have a dress code, and, unlike all online casinos and many other land-based casinos, do not stay open 24/7.
Most German casinos do not open until noon or later and close at 3 a.m. or earlier, even on weekends. No one under 18 is allowed to gamble. Some of the casinos charge a small entrance fee or ask you to sign a debt guarantee note.
The German land-based casinos are struggling, losing customers because, in the opinion of some analysts, they are not keeping up with the times. All of the casinos are state-run. The advertising restrictions, limited hours of operation, entrance fees, smoking ban (since 2008), and lack of entertainment, as well as the availability of more convenient online gambling, are all contributing factors .
Meanwhile, the approximately 10,000 privately owned slot machine arcades all over the country mostly don’t check a person’s age and don’t charge admission so many young people go there instead.
A Look At Poker
Poker first started becoming in popular in Germany after World War II with the influx of American soldiers based there. Initially, poker was largely confined to private games in homes and the back rooms of bars, and many years passed before the game was offered in casinos and, even later, online.
As mentioned in the previous section, the legality of any of the sites open to German players is suspect, but so far no German players have been arrested simply for playing online poker.
As one of the stops for various major poker tours, Germany has hosted both the Everest Poker European Championship and the European Poker Tour. In addition, a new crop of world class German players has been making headlines with multi-million dollar tournament winnings.
In 2011, TV viewers round the world got to see Heinz Pius, as one of the “November Nine,” capture the title in the World Series of Poker. More recently, the top 3 players, in a field of 2,133 entrants in the $5,000 buy-in 2013 Pokerstars World Championship of Online Poker were all from Germany.
Previously unknown player Chris Moneymaker’s WSOP win in 2003 will forever be known as the catalyst for interest in poker worldwide to skyrocket. Likewise, for many Germans, upon learning that one of their own has won a major tournament, the lure of life changing sums of money must make the temptation to play, whether they can afford it or not, irresistible.
Problem Gambling in Germany
Gambling addictions have continued to be a concern and plague the nation. However many initiatives have been put into place in order to help curtail this malady. One major area of concern is the burden that is placed upon the the medical system in order to address sufficiently this problem.
The good news is that because the government recognizes this as a social concern, citizens of Germany are able to get mental health support. This has some of the anti-gambling community up in arms as it does in the end drive up costs.
Over the last decade, the number of compulsive gamblers seeking treatment in Germany, of whom 70 to 80% are male, has been rising steadily. According to a March, 2012 report issued by the Bavarian Academy for Addiction and Health Issues, estimates of the number of pathological gamblers in Germany are at least 103,000 and possibly as many as 290,000, or .2% to .6% of the population. Another 103,000 to 350,000 Germans are believed to have a gambling problem. However, only a small fraction of all of these people is receiving appropriate treatment.
Another big problem in Germany is underage gambling, which is even more prevalent thanks to online gambling. Unlike the government controlled casinos which supposedly disallow anyone under age 18 to play, the licensed gambling machines in arcades, restaurants, and bars are readily accessible to young people whom the casinos would turn away.
Since these machines first became legal in 2006, they have greatly increased in number-now totaling more than 240,000. Although local municipalities are free to impose additional restrictions beyond the federal regulations, any such rules are extremely difficult to enforce.
Berlin passed a law that took effect in June of 2013 that reduced the cap on the number of slot machines per establishment from 12 to 8. This greatly changed the number of machines by removing close to 22,000 machines.
One of the biggest problems facing Germany is the availability of online gambling. Never before has it been easier to play for real money regardless of what age you are. It is very easy to present yourself as older than you are in order to participate in online gambling. 2019 brings with it new challenges that were not present a decade ago.