Changes in sight: Interim report on the evaluation of the GlüStV published

The first comprehensive evaluation of the 2021 State Treaty on Gambling (GlüStV) is planned for 2026. The interim report announced in spring 2024 has now been published. Among other things, it contains urgent areas for action. This naturally raises the question of whether significant changes to the current regulatory requirements are to be expected and whether the German gambling landscape may even become more attractive in the foreseeable future?

In addition to the online casinos and sports betting providers licensed in Germany, there is a large proportion of unregulated platforms that are used by a large number of gamblers in this country. The German Online Casino Association (DOCV) even came to the conclusion that "at least three quarters of online gambling turnover is generated in the black market". This situation is in clear contradiction to one of the core objectives of the GlüStV of 2021: namely strong channelling, in which people willing to gamble are to be directed into the regulated market in a sovereign manner. In order to ensure the successful realisation of this project, sufficiently attractive licensed gambling offers are required above all, which form real alternatives to unregulated platforms. Will this intended mechanism for combating the black market really be implemented satisfactorily? This is just one of the questions raised by the publication of the interim report.

The 76-page document marks the start of an ongoing evaluation of the GlüStV from 2021. This regular review is required by law in accordance with Section 32 sentence 2 GlüStV 2021. The first full evaluation is scheduled for 31 December 2026. Thereafter, summarised reports are to be published every five years, on the basis of which further developments are to be reviewed. The Joint Gambling Authority of the federal states (GGL) has probably had the interim report on the evaluation of the GlüStV 2021 ready for quite some time. It was recently approved - exactly as planned - at the Conference of Interior Ministers from 19 to 21 June 2024.

The explanations and proposals are divided into four sections, which this article also follows: The first is an assessment of some of the general regulations and developments associated with the validity of the GlüStV. This is followed by a focus on specific conditions for the individual forms of gambling. The interim report also scrutinises the GGL and its work. Finally, the urgent need for action in relation to the GlüStV of 2021 and the current regulatory requirements are identified. The latter area is of course of particular interest, as are the questions: Are significant changes to be expected? How long can it take for something to happen?

General provisions - health protection, channelling, player and youth protection

A central concern of the GlüStV of 2021 is to guide players towards legal gambling offers and to create certain safety requirements. Accordingly, the first part of the interim report deals with the evaluation of the points "Health protection, channelling, player and youth protection":

• Transformation of the market: it was concluded that the goal of transforming the (formerly) existing comprehensive black market had been achieved. It has therefore been possible to create a licensed environment - the extent to which this is actually used, i.e. whether significant channelling takes place, is not an issue here.
• Player protection: According to the authorities, the effect of player protection can only be evaluated with scientific support. Important findings are still lacking. Nevertheless, special licence requirements for sports betting, online poker and virtual slot machines, gambling advertising, the regulation of online offers, social concepts and educational methods, player blocking systems and gambling supervision were assessed. In particular, problems are recognised with regard to compliance with advertising times. This is to be tightened up in future. There will also be standardised, reliable and restrictive regulations for sponsoring, which have not yet been in place.

Individual forms of gambling - sports betting, virtual slot machines and online poker

The second section of the interim report deals with specific regulations on individual forms of gambling. In particular, the regulations that have been newly added or have undergone major adjustments with the GlüStV of 2021 were considered. This applies in particular to online variants of sports betting, slot machines and poker. The following preliminary assessments were made:

• Sports betting: In the area of sports betting, the high relevance of the review by the gambling supervisory authority is emphasised. The procedural regulations for the authorisation and regulation of individual types of betting and betting outlets via the GGL have proven their worth. With regard to the possible expansion of betting options for event betting and certain forms of live betting, a more precise basis for assessment would be required. Particularly with regard to non-European sporting events, there is uncertainty in the assessment. It could be helpful to get the providers who want to include such options in their programmes on board for the analysis.
• Slots: There is not enough empirical data available on the effects of virtual slot machines - especially in terms of player protection. However, the evaluation of the authorisation process for new games revealed a clear need for improvement. To date, the authorities have reviewed each game themselves, which means that the publication of new titles takes an enormous amount of time. The proposed solution to this problem is to outsource the review process to the developers. This should speed up the processes considerably.
• Poker: In the case of online poker, too, the focus was mainly on the authorisation procedure. However, no need for action is seen here - in the eyes of the GGL, everything is running as it should. Once again, reference is made to the fact that specific study results must be awaited for a more precise evaluation.
• Live games: With regard to live casino games, which can in principle be licensed under the GlüStV, it was merely stated that the relevant circumstances on the German market are almost impossible to assess. Simply too few federal states have created regulations for such offers. The fact is that the federal states can organise such games on their own territory on a statutory basis or authorise private companies to do so. So far, this has only happened in Bavaria, where the state lottery and casino administration opened the first German live casino in spring 2024.

The GGL - effective enforcement of gambling regulation?

The GGL is the central gambling supervisory authority for all federal states. It is tasked with monitoring the material regulatory innovations of the GlüStV 2021. The question here is: Will gambling regulation be enforced effectively?

On the whole, the establishment and work of the GGL is described as "successful". Only the lack of personnel is seen as a problem. It is recognised that many (important) positions are still unfilled, but this should be rectified as quickly as possible.

Urgent need for action - extended GGL competences, IP blocking and authorisation procedures for slots

The previous paragraphs have already outlined some interesting findings on the part of the authorities, which point to some significant changes. But now things are getting even more concrete: Based on the analyses to date, "high-priority change requirements" have been identified. There is therefore an urgent need for (regulatory) action on the following points. This relates in particular to the expansion of the existing competences of the GGL, a tightening of IP blocking and an increase in the effectiveness of the licensing procedure for virtual machine games.

• Expansion of competences: To date, the GGL, as the highest supervisory authority, has only been authorised to request information on applicant gambling providers from domestic authorities. In view of the fact that most of these companies are based abroad, this is in need of improvement. In future, it should also be possible to utilise the findings of foreign authorities. This should also include specific security authorities in order to be able to reliably identify at an early stage if an applicant for a licence was or is involved in critical matters.
• IP blocking: Section 9 (1) sentence 3 no. 5 GlüStV 2021 establishes the authorisation basis for IP blocking. This means (in general terms) that it is legally possible to technically block access to illegal online gambling offers. However, the paragraph has been categorised by courts as insufficient, unclear and vague. The relevant circumstances are to be rectified so that network blocking can be effectively implemented. The options should then also be increasingly applied to advertising measures for illegal gambling.
• Licence procedure for slots: Currently, every single slot game that is to be made legally accessible in Germany requires a licence from the GGL. It has been recognised that this procedure involves a disproportionate amount of effort. The licensing procedure is currently only conducted on the provider side, which means that the online casinos submit the games for evaluation as part of the licence check - the developers are not directly involved. To speed up the licensing process, the procedures for evaluating provider and gaming licences are to be separated in future. The aim is to finally involve the providers directly - important steps can then be coordinated in a direct exchange between the GGL and the developers.

As can be read in the press, Working Group I of the Conference of Interior Ministers has been tasked with further examining the urgent need for change identified and drafting a specific amendment to the Interstate Treaty - provided the new evaluation confirms the need to amend the GlüStV in 2021.

Conclusion

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