Germany has the biggest and the strongest economy within the EU and is probably its most influential member. According to several studies, the country has seen a significant rise in the past 10 years with over 2 million German citizens actively participating in online casinos, making it a highly desirable market for the digital entertainment enterprises.
On the other hand, the operators are constantly facing new challenges provoked by the ever-growing iGaming industry’s global standards and demands.
Obtaining a license is a significant part of the business process, although nowadays, you will find many companies that provide gaming services without it.
The problem with German casino licensing
Currently, in Germany, the only legal casino websites hold a license from the state of Schleswig-Holstein and are available exclusively for residents of the particular area. Starting October 15th, 2020, operators are able to provide gaming services as long as they adhere to specific guidelines. They have to meet a large number of requirements in order to work untroubled, along with a 30-point plan, the sole purpose of which is to guarantee player protection. The measures include a monthly deposit limit and regular information about losses and gains.
The sports betting sites are regulated by the Darmstadt Regional Council, which in December 2020 issued its first 15 sports betting licenses, covering 75% of the German sports betting market, in what the media defined as “a historic move”.
What is an online casino without a license?
The German players use the term “casino without a license” for online gambling sites that don’t have a local gaming authority license. Nationwide they are called “casino ohne Deutsche lizenz“, which literally means “casino without a German license”. Still, such online casinos are not entirely unregulated as usually, they hold an operating certificate from the MGA or the Curacao gambling officials.
Malta is a tiny island off the coast of North Africa, located in the Mediterranean Sea, below Sicily. It is a member of the British Commonwealth as well as the European Union. Malta was the first jurisdiction within the EU to regulate online gambling on its shores. The Malta Gaming Authority (MGA) was established in 2001 and is one of the most respected regulators and probably the largest in the industry. Its main task is to ensure the fairness and transparency of the games, identify and prevent fraudulent activities, and provide a secure business environment. The MGA license covers different forms of online gambling, land-based casinos, and betting shops within the EU. According to multiple sources, the Maltese license will lose its validity in the country with the new regulations and the first official German Gaming Authority on the way.
Curacao is a small offshore territory located in the south of the Caribbean Sea near the coast of Venezuela. On October 10, 2010, the island became a self-governing state within the Kingdom of the Netherlands. Curacao e-Gaming was found in 1996 and is one of the oldest gambling regulators in the world. Their gaming license is easier to obtain than a driver’s one, and many operators opt for it because the procedure is much shorter and cheaper. The entire process usually takes up to 20 days, whereas to get an operating certificate from the MGA, operators must wait up to 6 months. The Gaming Authority is notorious for its loose regulation, and most of the blacklisted online casinos hold a Curacao license.
Is it legal for German players to play at unregulated online casinos?
Many countries will only allow gaming platforms to legally operate within their territory if they hold a license from their respective regulatory bodies. Previously, it has been illegal to gamble online on casino games in most of Germany’s states, but citizens are now able to wager at gambling sites registered outside of the country.
In 2016, the EU ruled that Germany can not penalize or restrict unlicensed foreign operators, and players will not be prosecuted for playing at offshore online casinos, many of which accept local customers and are also available in German. You need to remember that you can not rely on the German law or authorities to protect your rights and finances if playing at a foreign casino.
The Interstate Gambling Regulation Treaty
The main legal framework governing land and online betting in Germany is the Interstate Treaty on Gambling 2012/2020, which sets out the main objectives and fundamental elements of the German gambling regulation. It was adopted by 15 of the 16 country’s states in 2012, and by Schleswig-Holstein in 2013.
Glücksspielneuregulierungsstaatsvertrag or the Interstate Gambling Regulation Treaty maintains a state monopoly on the operation of lotteries, online casinos and provides for a licensing process for sports betting as well as defines the specific types of gambling that are covered under the legislation.
The current version of the Interstate Treaty is valid until June 30th, 2021, and for a long time it was not clear whether the German federal states would agree on a new unified regulation.
The reason for the disagreement was in particular, whether the online gambling market should be liberalised. While some federal states strongly supported the introduction of a licensing procedure for online casinos and poker, others wanted to keep the online ban. Still, following a significant amendment, the ban was lifted, and from July 1st, 2021, they should be legal on a state level. A new regulatory authority will be established, which will handle the licensing, ensure protection for vulnerable people showing signs of addictive behaviour, and introduce strict safeguarding laws against underage gambling.
The number of online casino licenses per region will correspond to the number of brick-and-mortar casinos in the respective area.
Apparently, Germany is taking its first steps towards a real and responsible regulation of online betting, but its landscape and level of state control are still unclear.
German gaming operators are currently under a transitional regime with heavily restricted forms of online poker and slots and fewer stipulations on online sports betting.
If the Interstate Treaty 2021 enters into force, Schleswig-Holstein online casino licenses, which are valid on June 30th, 2021, will be extended until December 31st, 2024. As already mentioned, most of the new regulation’s main objectives will include the prevention of underage gambling, gambling addiction, and criminal acts, which will lead to numerous requirements linked to social responsibility.
Here’s a part of the obligations for the providers of gaming services within German’s territory:
A registered office in the EU or EEA.
A German website with all necessary information in German.
Full and complete customer’s verification using means of identification and authentication based on the German youth protection requirements to prevent minors from gambling.
Monthly deposit limits of €1000 per player.
A “panic button” that leads to a 24-hour exclusion.
No advertising for unlicensed gambling sites, including virtual slots and online poker.
“Reality Checks” after one hour of playing are to be implemented.
An automated gambling addiction early detection system must be set up.
Further participation in the virtual slot machine game is only permitted five minutes after confirmation of the reality check.
A slot stake may not exceed €1 per spin.
In online poker, the assignment of players to a virtual table must be random, and players can not choose on which table they play at.
Multiplayer poker games with a live dealer such as Texas Hold’Em or Omaha Hold’Em are prohibited.
Operators are expected to remove roulette, baccarat, and other table games from their platforms.
The use of the word “casino” for marketing purposes is banned.
The applicant must provide a security deposit of at least €5m, and in individual cases, this amount can be increased according to the expected monthly average turnover (maximum €50m). For online sports betting licenses, the amount could be reduced upon request.
Advertisements for online gambling offerings are generally allowed with specific limitations. In particular, advertising must not be aimed at minors and must not be presented as a means of solving financial problems. The limitations further include a ban on broadcast and online advertising between 6 am and 9 pm.
How do operators obtain a German license?
Apart from the requirements mentioned above, which are currently enforced on gambling operators and will be an absolute obligation in the future, most of the general application procedures or timelines are not determined yet. However, the process will set out specific objectives that the applicant or the business corporation needs to fulfill in order to qualify for a license. These will mainly concern the candidate’s reliability and competence, financial stability, and social responsibility standards. Furthermore, they must demonstrate that they aim to provide safe and transparent services and wish to comply with the gaming regulation.
A crucial aspect of the German licensing process is that applicants will be required to prove their qualifications by submitting detailed descriptions of their business and operation policies, including responsible gaming, IT security, Anti-Money Laundering, and marketing strategies.
The type of taxes imposed on gambling operators will heavily depend on the gambling product in question and the extent to which state legislation will be relevant. Online casino offerings in some states will be subject to a combination of gross gaming revenue and profit taxation.
Benefits of playing at an online casino without a German license
Many players find the large number of restrictions imposed by the German Gaming Authority as rather tight and disturbing, which motivates them to register and play at unregulated casinos. The latter provide more relaxed regulations and better gaming conditions than the ones licensed in Germany.
Here’s a brief example of the main advantages that differentiate offshore casinos from their German analogs and draw most German players’ attention.
All players throughout the country can register and play at foreign casinos. The ones licensed by the state of Schleswig-Holstein accept only customers residing in the particular
A vast range of software providers to opt for, including industry’s leading developers such as Microgaming, NetEnt, Play’N Go, Big Time Gaming, and many others. Local casinos usually work with only a handful of suppliers, and the majority of them are mostly smaller-scale ones.
A wider variety of high-quality gaming products to choose from. Offshore casinos usually offer thousands of different games, including multiple variations of roulette, baccarat, and blackjack in video and live format. In contrast, the German ones support tiny libraries of about 200 games, which are mostly slots and video poker, and the live dealer games are forbidden.
There is no mandatory delay between spins on slots, and the autoplay option is not restricted.
Lots of promotions for new and existing players such as Reload Bonuses, daily and weekly offers, slot tournaments, loyalty schemes and VIP programs.
Bets on slots are not limited to €1 only.
The deposit limits are only optional, and players can choose whether to set such or not.
No extra charges on sports betting Most of the sports betting operators licensed in Germany charge a 5% tax on winnings, which doesn’t apply for casinos without a local license.
Please note that the purpose of the list, as mentioned above, is purely informative and does not aim to encourage you to register and play at foreign casinos. It’s 100% up to you.
Disadvantages of gambling at an online casino without a German license
The major drawbacks of playing at offshore casinos are the lack of a safe and reliable gambling environment, a loose regulation regarding responsible gaming practices, and frequent personal and financial data security failings.
Customers playing at foreign casinos can not complain to the local gaming authorities, and the offshore gambling officials do not monitor their licensees’ operating procedures or get involved in misunderstandings between the players and the operator. Very often, this might result in delayed withdrawals and unpaid winnings.
Players can not sign up for a national self-exclusion program,
which covers every online casino licensed by the local gaming commission. It means that once you join the scheme, you won’t be able to access any of the websites or reverse or modify the self-exclusion period. Regarding this matter, national self-exclusion programs are similar to the GamStop scheme. At casinos regulated by Curacao e-gaming, for example, you can exclude yourself from gambling by contacting the specific casino and the restriction won’t apply even to the other brands run by the same operator if any, let alone the rest holding the same license. Suppose you have registered at several online casinos, you’ll have to inform each one of them separately to suspend your account. Still, participation in the program can be terminated or adjusted at any time regardless of its initially set duration.
Although the benefits of playing at online casinos without a German license outnumber the disadvantages, the latter affect areas of much greater importance.
Customer security and experience have always been controversial matters when playing at foreign casinos. With all those above mentioned, joining a locally regulated casino seems much more appropriate for players from Germany as this will guarantee the highest level of customer protection and a safe and reliable gambling background.
The operators do not charge taxes on winnings, neither does the state. According to the European Commission’s taxation database, winnings derived from online casino betting and gaming in Germany are not subject to income tax, but if the betting is organised in Germany, or the player is a resident of the country sports bets are. Most of the leading operators cover the lost bets themselves but retain a 5% fee on winnings, which are payable to the financial authorities.
You can request a self-exclusion period in any foreign online casino, although the procedure is not as strict as the one in the national responsible gaming programs. For instance, you can reverse or adjust the time frame at any time, and the suspension applies only to the particular casino. Additionally, you can set up daily, weekly and monthly deposit, wager and loss limits or fix a specific gameplay period, which are very useful and effective tools to prevent gambling harms too.
Yes, the national gambling protection services are only in charge of operators holding a German gaming license, and the suspension doesn’t affect the foreign casinos. Still, we advise you to gamble responsibly and not search for different options to fly under the radar if you’ve already taken steps towards addictive behavior harm prevention. Gambling should be seen as an activity for fun, and not as a way of generating income, so please keep track of the time and the amount of money you spend on gaming activities.
Most of the online casinos which do not have a local license support the same range of payment methods like the ones that have. You can use major credit and debit cards, such as Visa and Mastercard, different cryptocurrencies, such as Bitcoin, Litecoin, and Ethereum, and multiple alternative options such as Klarna, Trustly, Paysafecard, Skrill, Neteller, Ecopayz, Much Better, Giropay, Sofort, CashToCode, MiFinity, and eZee Wallet. Also, most of these casinos operate in euro, which is another great advantage and convenience.
Basically, if you’re located in Germany, you can register at most online gambling sites unless they have specific country restrictions. A vast number of foreign gambling operators accept German players, have a German version of the site, and German-speaking customer support. Not to mention that many foreign sports betting sites provide much better bonus conditions for players from Germany.
It depends. If the casino has no license at all, you should avoid it at all costs. The ones regulated by the MGA are reliable and have a good reputation as the authority strictly monitors the licensee’s operating procedures and takes measures against customer rights violations. The Curacao licensees have a bit more controversial image as the gaming officials do not mediate in possible disputes and do not control the operators gaming services provision at all. Still, it doesn’t necessarily mean that playing at an offshore casino will result in a negative experience, but please bear in mind that if any issues occur, it will be your sole responsibility to resolve them. We can advise you to research the particular casino very carefully. Search for licensing and ownership information on its website, browse over the internet for feedback from players or check our reviews, including essential information about promotions’ conditions, game and software providers variety, and the casino’s overall rating and performance.
It depends on your preferences. Casinos without a local license are quite favorable among players because they have tons of bonuses and promotions, offer a great choice of gaming software providers, and support a wider game variety, including lots of table and live games. Furthermore, they do not have restrictions on the autoplay mode or a delay between slot spins, and the monthly deposit limits are optional. The ones holding an MGA license even guarantee assistance from the authorities in case of misunderstandings. The major drawback of the ones registered in Curacao is the lack of strict regulation. The authorities do not hold accountable their licensees for anything, meaning that the latter can easily breach their internal policies and cause a lot of trouble to their customers. Once again, we would like to note that playing at offshore casinos doesn’t automatically mean a negative experience.
The online gambling sites scene is constantly growing, and new online casinos are launched every day from both – newcomers and well-established companies with solid experience in the industry. The large number of restrictions and the elaborate application process are the main reasons why foreign operators are not willing to obtain a local license, but even without it, it’s entirely legal to accept and provide gaming services to German players.
You must be over the age of 18 to use any gaming platforms with or without local operating license. Providing gaming services to under-aged players is strictly prohibited worldwide.