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New German sports betting online and land-based licenses upcoming

After a long delay it seems the right time for the award of German sports betting licenses

Beginning in January 2020, new German online and land-based sports betting licenses may be issued and here is an outline of the next steps.

The end of the “limbo” on German licenses seems over. On 13 August 2019 the competent gambling licensing authority of Hesse, the Darmstadt Regional Council, held an informational meeting on the upcoming 2020 sports betting licensing procedure in Germany. This meeting was an opportunity for stakeholders in the sports betting industry in Germany to discuss questions about the recently published minimum licensing requirements directly with the authority.

My law firm attended this meeting, and here are our key takeaways. This article was originally published on All-In blog by my German gambling colleague Christoph Engelmann on exciting developments in Germany.

German online and land-based sports betting licenses available

The authority is confident that the intended amendments to the State Treaty on Gambling (Glücksspielstaatsvertrag = GlüStV) will be ratified by all 16 German states by 31 December 2019 to ensure the beginning of the licensing procedure on 2 January 2020. The transposition process has already started in all states.

Applications for German sports betting licenses will be processed on a “first-come, first-served” basis – but the authority will not start to review the applications earlier than 2 January 2020.

Every applicant has to submit a new full set of licensing documents in accordance with the minimum licensing requirements – even if the operator has been found to fulfill the licensing requirements in the 2012 procedure or if it is tolerated in Schleswig-Holstein. However, existing documents can be reused if they are still up-to-date.

The authority intends not only to confirm the receipt of a license application, but it will also confirm the eligibility of the documents to be examined and – if needed – it will request to submit missing documents.

One sports betting operator may operate different brands and websites under one license. The details of this need to be explained by the operator in the sales concept and the security concept.

Responsible gambling policies become a requirement 

One of the main parts of the licensing requirements is to submit a social concept – that is also one part that the authority thinks is the most difficult. The social concept needs to specify concrete responsible gambling measures to be implemented in the company. This requirement includes the exclusion of underage and blocked players, measures to prevent addiction, dealing with problematic gambling behavior and training of staff;

The social concept needs to deal directly with the specific company and the sports betting offering it provides. Quoting general studies or scientific findings of gambling addiction in a “general section” of the concept is not necessary.

Operators are required to exclude blocked players by integrating the central blocking system OASIS at the time of granting of the license. For the authority it is sufficient to cross-check the player against the blocking system with each login – this means that a cross-check will not be necessary with each bet that is placed.

Additional requirements to be met

The betting program (details of the specific betting offering that the sports betting operator intends to provide) is not part of the license application, but it needs to be submitted to the authority after granting of the license.

The license will have several collateral clauses that will deal with further requirements of the operator. These clauses include if bonuses and discounts will be allowed (which needs to be explained in the sales concept), how the social concept needs to be scientifically evaluated and it also includes reporting obligations of the operator to the authority.

Advertising on TV and the Internet needs an additional advertising license that is granted by another authority – the district government of Düsseldorf in North Rhine-Westphalia.

The licensee shall provide interfaces for checking all game processes in real-time. This requirement will be the last step of the authority to check the compliance of the operator if there are “irregularities” in the supervision of the operator. The authority intends only to use this if all other methods of gathering information fail – including asking the operator to submit documents. At the moment, the authority does not have exact technical specifications on how to deal with this requirement.

Dealing with unlicensed sports betting operators

At the moment the authority monitors around 160 sports betting operators in Germany. It expects all of them to submit a license application. If not, the authority will request the operators to submit an application within a specified deadline. If an operator does not submit complete licensing documents upon that request, the authority will prevent the operator’s sports betting business in Germany.

It is time to get ready now

To successfully apply for one of the new licenses, sports betting operating have to comply with the comprehensive “minimum requirements”. In our experience it usually takes several weeks to prepare all necessary documents – so now is the time to start drafting the application.

Submitting an excellent application will speed-up the licensing process. This requirement includes not only complete licensing documents but also the content of the documents that comply with the regulatory requirements.

The authority intends to update its website with FAQ and new requirements and documents for the licensing procedure from time to time. A substantial update is to be expected until the end of the year. This condition will include a form with all necessary declarations that the applicant needs to sign (instead of drafting the declarations on his own). Further questions about the licensing procedure may be discussed with the authority (in German).

If you want more information on the above, feel free to reach out, and I will be glad to introduce you to our German gambling colleagues.

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Giulio Coraggio

I am the head of the Italian Technology sector and the global head of the IoT and Gaming and Gambling groups at the world-leading law firm DLA Piper. IoT and artificial intelligence influencer and FinTech and blockchain expert, finding solutions to what's next for our clients' success.

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