Germany's Schleswig-Holstein to Put Forward a New Gambling Legislation

Discussion in 'Gambling News' started by Marina, Mar 19, 2019.

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  1. Marina

    Marina Administrator Staff Member

    Schleswig-Holstein to Put Forward a New Legislation With Plans to Extend Expired Gambling Licenses


    The state legislators from Schleswig-Holstein proposed putting forward a new legislative bill that would extend iGaming licenses provided to operators across the state which have expired.

    Namely, their licenses would be valid until 30th of June, 2021 but Schleswig-Holstein intends to create a whole new framework after this date expires.


    The Proposed Legislation

    The licenses will be valid until 2021 due to association with the State Treaty in Germany on Gaming, however, Schleswig-Holstein will set out ways in which the existing operators would hold an expired license and will still be authorized to continue operating across the state, right until the state is ready to issue brand new licenses.

    Operators should be prepared, if the new bill passes, of a 20% tax on gross revenue, which is exactly the same rate set out under the previous, expired licenses. If the Treaty gets integrated into the State law, the licenses will come into force from 2020, January 1 and will be running until 2021, for experimental purposes. The experimental phase will allow the 16 Minister-Presidents in Germany, from all 16 states to assess the legislation's effectiveness and its success.

    The German states, according to the new proposal, are currently discussing and trying to develop a solution which would establish the proper regulation for all the gambling-related laws. The state legislators have previously mentioned the interest of a number of other states to join in on the action, such as Hesse, Nordrhein-Westphalen and Rheinland-Pfalz.

    A handful of operators were given iGaming licenses in 2012, and the current regime for gambling works with the State Treaty. The licenses in question have expired in December 2018, so of 2019, they were not legally valid anymore. The deadline December 2018 was a consequence of a political change in government, which saw the Schleswig-Holstein pledge to integrate the State Treaty in 2012, allowing licenses that had been issued by the previous government to eventually expire.

    However, certain parties agree on making more liberal and expansive regulations. The Christian Democratic and Social Union, the Green Party and the Free Democratic Party are the backers in question, which are in power in Germany since 2017. Therefore, all state lawmakers will meet in two days and will discuss the incarnation of the State Treaty. A draft of the discussion was outlined in a letter from the Secretary of State, Nathanel Liminski, which is also the head of the State Chancellery of Nordrhein-Westphalen.


    Liminski’s Letter

    The Secretary of State confirmed a number of changes to legislation, including the cap removal on sports betting licenses. He also confirmed that the licenses will come into force next year on January 1 and the experimental phase will last until 2021, however, he explained that the licenses could remain valid up until June 30, 2024. The extension could happen provided that legislators are in agreement with the Treaty and see that it is fulfilling its goals. Therefore, until the new Treaty comes in force next year, there will be a toleration period for all existing licensed operators that pay the 20% tax to continue operating in Germany and offering sports betting and other sorts of gambling.

    All elements of the Treaty from 2012 still apply, such as the tax rate set at a 5% turnover, the mandatory €1,000 spending limit a player could wager per month and the outright ban on in-play betting.

    Liminski also said in the letter that due to lawmakers’ busy schedules, the legislation would need to be signed off around mid-April. He said it would become obsolete if all 16 Minister-Presidents fail to prepare their proposals by January 1, next year.


    The Possible Outcomes for Gambling in Germany

    This statement also works as a reminder of the two previous failed attempts to make changes to the legislation. The first one in 2012 was blocked by legal challenges which were against the license cap. The second one was in 2017 when lawmakers couldn’t reach a consensus, and this one will be the third. Therefore, saying it would be obsolete if they don’t come to an agreement next year is a legit statement.

    But, there’s another threat on the horizon. Deutsche Sportwettenverband, the sports betting operator association last week dismissed the 2017 legislation saying it was unfit for purpose, and this could cause further disappointment to lawmakers. The association criticized lawmakers for not making any significant changes to the 2012 Treaty except for removing the license cap. Therefore, what will eventually happen is yet to be seen.
     

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