Casinos Without a German License

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”.

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 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.

• 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
  area.
• 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.