State initiates ban on online gambling

To play poker, betting or lottery on the Internet has so far been almost completely prohibited in Germany. Although the various providers believe that they are in a legal grey area, the introduction of the State Treaty on Gambling in 2012 does not allow providers to offer their services to players and betters from Germany. Only 48 of them are really legal and only for players from Schleswig-Holstein. The federal state had already issued some licenses, which are still valid for some years. In the meantime, however, Schleswig-Holstein has also joined the State Treaty on Gambling.

Bans with little effect

The authorities are well aware of the current situation. In the meantime, more than 100 bans have been issued to the relevant providers, but these have hardly been observed by companies based abroad. “We have absolutely nothing here to stop these illegal offers and accordingly, everyone can play freely”, said Ingo Fiedler of the University of Hamburg. He had analysed the market of online poker.

Now the state wants to take serious measures against the gambling industry. According to ndr.de, the federal state of Lower Saxony could play an important role in this. For the time being, the federal states will jointly send 28 hearing letters to major online gambling providers. The states probably intend to ban online poker and casinos in particular, but also lottery brokers. If this first step does not have any effect, they want to resort to a means that has hardly been tested so far. The state of Lower Saxony is the central authority for so-called payment blocking. The payment transactions to and from the affected providers should be blocked, as banks and financial service providers are no longer allowed to forward money to or from the providers.

Payment blocking proved its worth in the USA a few years ago – at that time the gambling industry was severely curbed. In Germany, this method has hardly been tested at all, but one is nevertheless confident that this last measure would be the only effective one. “In Germany, we are certainly breaking new ground with this. However, there are experiences in other countries in the world in this context. For us in Germany, the important thing now is to prepare ourselves for this,” explains Dirk Verleger, gambling officer at the Ministry of the Interior in Hanover. Ingo Fiedler also gives this measure a fairly high chance of success.

Banks have various fears

Banks are rather sceptical about payment blocking. They point to various problems concerning the practical and legal implementation of the State Treaty on Gambling. Among other things, the financial institutions could not differentiate at all whether payments to companies were related to gambling or not.

The providers want to avoid payment blocking from the outset. Various lawyers, such as Wulf Hambach, who represent major gambling providers, are threatening to sue for damages against the federal states. The German bans do not comply with European law and are therefore not justifiable. Most providers have a license from another EU country. According to the European freedom of services, the offer could not be prohibited. For years there have been various disputes, some of which have reached the European Court of Justice. It concerns the validity and interpretation of the State Treaty on Gambling. Should it come to the fact that payments are unjustly stopped, Hambach promises another wave of lawsuits: “The sums will be astronomical if you look at the business in the online gambling sector and if it is then possibly stopped unjustly.”

As a tipper you don’t need to worry about it so far. As long as the payments are possible, the end consumer does not make himself punishable. The legal situation is still unclear and so can still be diligently betting or playing poker. The providers would have to prevent gambling from Germany.