State Treaty on Gaming Regulation looks good for iGaming in general, but bad for affiliates
The recent draft of a new state regulation for iGaming has been hailed as a first step towards a modern, market-compliant gaming regulatory environment in Germany, but in its current form, affiliates (and also operators therefore) stand to lose out in a big way.
With the creation of a central and professional gaming supervisory authority as a result of the (currently in draft) State Treaty on Gaming Regulation, Germany is transforming its decade old legislation on how iGaming businesses operate.
A crucial change is the fact that applicants do not have to have their company headquarters to be based in Germany. Thus, for the first time, the online casino and sports betting markets will be completely opened up for foreign operators.
The new legislation is due to come into force on July 1, 2021, if agreed at the upcoming Minister-Presidents meeting, a committee formed by the sixteen States of Germany to coordinate policy, which is due to take place on 5th March 2020. While the lottery in Germany would retain its current monopoly structure, the current ban for online casinos, which exists in most German jurisdictions, would be removed and replaced by a federal-level regulation. Sports betting would remain legal (as it is currently).
The problem that concerns both affiliates and operators is that the restrictions planned for inclusion in the new legislation, including in-play bets for live sports games (which accounts for more than 60% of all sports betting activity), and a crackdown on advertising, would have a detrimental effect on affiliate businesses. In a nutshell, this could eliminate the opportunity for the affiliate revenue share model in a broad swathe of iGaming sectors.
It’s proposed that a waiting time of five minutes would be implemented when switching from one offer to another - something that industry advocates say is completely blind to the second-by-second digital nature of the iGaming industry and its consumers’ habits, meaning the very real prospect of players heading outside the regulated industry to find their iGaming needs in the grey or black market sector.
Another short-sighted clause in the draft legislation is to impose a cross-provider deposit limit of EUR 1,000 per customer per month, limiting the market and stifling the competition currently driven predominantly by the affiliate sector.
Maarten Haijer, Secretary General of the EBGA, said: “The challenge will be to deliver a new regulation which is fit for the digital age we live in, which provides a safer gambling environment for consumers and enables a well-regulated and well-channelled market.”
Both the EBGA and the DSVW (the German sports betting association) are voicing their concerns over the unbalanced approach that the new legislation invokes. Likewise, many other industry bodies and commentators have expressed a similar opinion and urged German lawmakers to review the details of the new treaty.
SiGMAnews will keep monitoring the situation as the Bills are debated in the EU’s strongest member state, and we will update our audience of global operators and affiliates as the story unfolds.
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