GERMANY Law and Practice Contributed by: Jörg Hofmann, Matthias Spitz and Michelle Hembury, Melchers
Online casino acts in each federal state are expected in the near future. 3.2 Definition of Gambling As per the legal definition, a “game of chance” con- sists of three elements that have to be met collectively in order for an activity to be subject to German gam- bling regulations: • a valuable consideration; • the valuable consideration is given in exchange for a chance to win; and • determination of winnings is entirely or predomi- nantly a matter of chance. A game of chance is defined in Section 3 of the Inter- state Treaty. 3.3 Definition of Land-Based Gambling The Interstate Treaty does not include an express defi- nition of land-based gambling. It merely defines what constitutes a game of chance. In general, any game of chance offered in land-based premises and not remotely may be considered land-based gambling. 3.4 Definition of Online Gambling The Interstate Treaty only defines what constitutes a game of chance. Online gambling must be assumed whenever games of chance are offered via the internet or by any means of remote communication within the meaning of Section 312c (2) of the German Civil Code. This includes games offered via mobile devices. 3.5 Key Offences What constitutes a “key” offence depends on the gambling sector and how this sector is specifically regulated. For licensed operations, key offences will mainly be licence violations. Operations that are affected by the Interstate Treaty’s total ban on unau- thorised – ie, not licensed – gambling, or product or marketing restrictions may be confronted with other allegations; particularly, alleged unlawful operations and/or advertising. Enforcement in this context will mostly be under administrative law based on the practice applied by the German authorities. There are provisions in the law, however, that would theoretically allow enforcement under administrative offence law or criminal law.
The public organisation of “unauthorised” gambling may incur criminal liability. Enforcement has mainly focused on regulatory measures. Criminal proceedings against operators have only become publicly known in a few high-profile cases. These are usually aimed at major operators, and it is reasonable to assume that the public authorities use such cases to deter unregulated operators. However, there is also a clear tendency for public authorities to significantly increase the number of enforcement measures, including those against payment service providers. 3.6 Penalties for Unlawful Gambling The Interstate Treaty provides for penalties of up to EUR500,000 per issue or for retaining the profits gained as a result of the violation. The latter is usually calculated by means of a gross evaluation and will not consider any expenses or costs. Penalties that are not set in the Interstate Treaty vary between the states as they are defined in state leg- islation. In administrative proceedings, interdiction letters will be issued on pain of fine in the range of approximately EUR10,000 to EUR50,000 per infringe- ment, depending on the relevant state law. Penalties under an administrative offence law would be higher (up to EUR500,000/proceeds of the crime), but again depend on state law. The sanctions set out under criminal law range from monetary fines to imprison- ment for up to five years (Section 284 (1) and (2) of the German Criminal Code).
4. Licensing and Regulatory Framework 4.1 Regulatory Authority The New Regulator in Saxony-Anhalt
The Prime Minister had decided that the federal states would delegate their responsibilities to the GGL, which has been exclusively responsible for the supervision and licensing of gambling on the internet since the beginning of 2023. The authority is located in the fed- eral state of Saxony-Anhalt. Until the end of 2022, the State Administration Office of Saxony-Anhalt was responsible for new online poker and virtual slot game licences.
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