After two unsuccessful attempts to pass a federal sports betting legislation, Germany launches renewed effort
Germany is making a fresh push to adopt a nationwide sports betting legislation after similar attempts failed in recent years. The third version of the Interstate Treaty on Gambling was unveiled earlier this month and heads of the country’s 16 states were encouraged to act on the piece so that it can be adopted across Germany early next year.
The recently introduced draft legislation will be discussed by the leaders of the 16 states at a special conference scheduled for March 21, 2019. If all German states ratify the proposed Interstate Treaty on Gambling in its current form, the piece of legislation will come into force on January 1, 2020.
Generally speaking, the Treaty allows for interested online and retail sports betting operator to apply for a license and provide their services to German customers in a regulated environment. An important change in the newly presented version of the legislation is the removal of a cap on the maximum licenses that will be issued under the new rules. Previous versions of the Treaty proposed a cap of up to 20 licenses, which was not received well by industry stakeholders and EU authorities.
In fact, the previously proposed cap was what prevented the piece of legislation from being adopted. Its original version was presented back in 2012. The Treaty faced a wave of discontent and legal challenges namely due to the license limitations. A second version of the piece failed to gain traction among the heads of the 16 states in 2017.
The lack of a cap on the number of licenses available is hoped to win lawmakers’ favor this time around.
Timeline for the Implementation of the New Regulatory Framework
As mentioned earlier, the Treaty is expected to take effect on January 1, 2020, if it gains the necessary support. The third version of the piece mandates that the so-called experimental phase for sports betting be extended to June 30, 2021 from June 30, 2019. The experimental period could be extended further to June 30, 2024.
The Interstate Treaty on Gambling is only concerned with the regulation of Germany’s sports betting market. There is no mention of online casino and poker in the legislative piece. Schleswig-Holstein, which has issued licenses for the provision of online sports betting, casino, and poker products under its own liberalized regime, will be able to renew those licenses and run its regime along with the federal framework, it became known.
Under the third version of the Interstate Treaty on Gambling, licensed sports betting operators will be taxed at 5% on their turnover. The taxation provision has been part of all versions of the legislation since its original introduction in 2012. It should be noted that using turnover as a taxation basis has not been a particularly popular approach toward taxing gambling services in most of Europe’s regulated markets. Under Schleswig-Holstein’s regulatory regime, operators pay a 20% tax on their annual revenues.
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