Could the Interstate Gambling Treaty fail in 2021? And then what?

Criticism of the "new" regulation in Germany has been around for as long as the State Treaty on Gambling (GlüStV) of 2021 itself. Over the years, however, resentment has continued to escalate and currently seems to be reaching a peak. The industry warns that the "regulators are guided by an ideal image of gamblers that does not exist". One wonders what could happen if the GlüStV fails (yes, that is possible). 2026 and 2028 will be key years.

When the new Interstate Treaty on Gambling was launched in 2021, hopes were high: with clear rules, uniform nationwide supervision and finally clearly licensed providers, digital gambling in Germany was to be steered in an orderly fashion. Today, four years later, little remains of the former optimism - the boat is increasingly getting into difficulties. Criticism - or rather mistrust - of regulation is greater today than ever before. Much of what was planned with the best of intentions for the restart in 2021 seems to be working far less well than once assumed.

In fact, these are just a few of the most striking recent reports that - especially when taken together - show that something needs to change. This basic attitude is now also reflected in a comprehensive analysis by the business magazine Games & Business. It poses the question of what could happen if the GlüStV fails. We want to take a look at this here, because ultimately, of course, all of this also affects us players.

"Area of tension: between control and attractiveness, protection and market logic, regulation and reality"

Games & Business has often published critical articles on gambling regulation in Germany in the past. However, there has never been such a comprehensive treatise and clear statement as there is now. There is talk of a complex "field of tension: between control and attractiveness, protection and market logic, regulation and reality".

According to the report, the State Treaty on Gambling in its practical implementation is like a system that is well-intentioned but hardly works in everyday life. Legally, the framework is clear - but in practice, there are many obstacles to overcome.

• Players have to struggle through complex registration processes, provide difficult proof of identity, accept annoying deposit limits, accept breaks in play - and find that the promised entertainment experience feels more like going to court than having fun.
• For providers, the regulations are also a tour de force. Technical changes, regulatory requirements, economic pressure and the emotional dilemma between safety obligations and loss of attractiveness - all of this is putting an increasing strain on legal operators.
• The desired channeling, i.e. the targeted directing of players to regulated offers, is only succeeding to a limited extent. Instead, the migration to the black market continues to increase.

For many users, platforms based in Malta or Curaçao that are illegal in this country but accessible to everyone seem like a modern, colorful alternative to the regulated German model. With no limits, no breaks, generous bonuses and a stylish front end, they offer exactly what many in Germany miss: an exciting gaming experience without major hurdles. The protection is missing - of course. But for many, the risk takes a back seat if the legal offer simply seems too unwieldy in comparison.

The result: even those who actually want to abide by the law turn away in frustration. Not because they reject the protection - but because they feel that they are being controlled by it. Games & Business puts it in a nutshell with the following sentence:

"As long as regulators are guided by an ideal image of gamblers that doesn't exist, the GlüStV will remain a good idea with weak implementation."

In the end, Games & Business warns, there is a paradox: the legally regulated system drives away the very people it is supposed to protect. And with every player who leaves, the GlüStV not only loses relevance, but also legitimacy, according to the quintessence:

"Nothing undermines a law as much as its practical ineffectiveness". The entire German industry is being "crushed between state requirements and real market conditions".

"Predetermined breaking point" can lead to the fall of the contract: 2026 and 2028 are crucial

Games & Business points out that the GlüStV is by no means set in stone. Rather, it is a temporary construct that has a "built-in predetermined breaking point". A comprehensive evaluation is due by 2026 at the latest. The interim report was already published in summer 2024.

• This review will focus on key questions such as the actual channeling rate, the effective detection of problematic gaming behavior and the economic viability of the current conditions for licensed providers. The answer as to whether the legal infrastructure is actually being used by the majority of players is likely to be decisive. Games & Business emphasizes that this evaluation will determine how regulation will proceed.
• The magazine also points out that both the German Federal Constitutional Court and the European Court of Justice could overturn key elements of the treaty if legal action by market participants is successful.
• the term of the current legislation ends in 2028. An automatic extension? Not a chance. In order to remain in force, the GlüStV requires the approval of all 16 federal states - each individual state government would have to sign anew. If just one signature is missing, the entire agreement is history.

And if no agreement is reached in 2028? Then the GlüStV could actually expire, warns Games & Business - without a transitional arrangement, without a plan B. Responsibility would inevitably return to the federal states. Some could create their own licensing models, others could ban gambling completely. This would also result in a regulatory patchwork. Worse still: a vacuum. Legal providers would be left without a national basis, which would open the doors wide to the black market and make it much more difficult to prosecute them.

Source of the image: https://pixabay.com/photos/ship-beach-sea-storm-wave-716778/

Central text source: https://gamesundbusiness.de/gluecksspielstaatsvertrag-jokerstar