The German State Treaty has been ratified by all state parliaments, the terms are set to come into place on July 1st. This will have a huge effect on the online betting and gambling industry in Germany, but what is the German State Treaty, and how will it affect the esports betting scene?
The new treaty
The German State Treaty or Glücksspielneuregulierungstaatsverag (GlüNeuRStV) will expand Germany’s nationwide igaming offerings beyond online betting to online casino games. This establishes a new federal regime for the country that had previously left the betting legislation up to the local state parliaments. This will have some serious and long-lasting effects on the online betting and gambling industry in Germany as all states will be obligated to follow its terms until the 31st of December 2028.
This adds new online betting and gambling options, the GlüNeuRStV legalises online poker and slots for all eligible operators. Online slots and poker will face a 5.3% turnover tax, slots will be restricted to a €1 stake limit per spin, with a spin speed average of 5 seconds, and live sports betting will be restricted to bets on the final result or next scorer. If this sort of tight control when it comes to betting options eventually spreads to the esports betting industry we could see a pretty big shakeup in the esports odds.
The treaty was approved back in March 2020 and despite the remarkable length of time that it has been debated and discussed, the topic of esports betting has not been brought up. We decided to find out exactly what this new online betting and gambling legislation means for the German esports betting industry.
The effect on esports betting in Germany
We spoke to Christoph Suess from the Darmstadt Regional Council about the potential this could have for legalised esports betting in Germany, here is what he had to say:
According to Art. 3, Par.1, Sent.5 State Gambling Treaty (GlüStV) 2021 a “sports event is a sports competition between human beings according to defined rules”. The term ‚ “sports” has still not been defined in the treaty and is thus still subject to interpretation. This is due to the fact that the understanding which actions are being recognized as sports is changing and can also change during the validity period of the GlüStV 2021. Therefore, the treaty contains neither a general ban nor an explicit permission for bets on e-sport events. At present, those events are not contained within the term ‚ “sports”, because the respective associations have not yet made this classification yet. However, it cannot be excluded that this changes during the effectiveness of the GlüStV 2021.”
It looks like they have yet to consider the inclusion of the esports betting market. They are still stuck in the seemingly outdated thinking that esports are not considered “real sports”. However, they have not yet ruled out allowing betting on esports games.
Esports betting sites currently operating in Germany
This could have a pretty serious effect on the foreign-regulated entities that currently operate in Germany, there could be harsher punishments, but as of the time of writing, no German citizen has had legal action taken against them for betting online. Most of the top esports betting sites in Germany are not licenced by the government. According to Christoph Suess from the Darmstadt Regional Council changes could be coming:
In a regulated market there won’t be any e-sports offers any longer in Germany, so customers have to switch to other, licensed sports gambling offers.
Regarding skin betting in computer games would have to be assessed, whether it fulfils the definition of terms according to § 3 GlüStV, in particular, whether the tokens can be transfered into real winnings.
Legal uncertainty on the German sports gambling market has finally come to an end. It has yet to be seen whether this will have an effect on the penal assessment of the participation in illegal gambling.
The introduction of the regulated market could spell the end of some major players that have capitalised on the grey market nature of German online betting. It is clear that they do not want to set a definitive answer in stone, they still have over a month to finalise the regulations before they come into effect on the 1st of July.
The future of esports betting in Germany
This new treaty is not a long-term solution, in reality, it serves as a way to provide the German people with an increased sense of legal protection as well as increase their tax revenue through state-regulated gambling outfits. There is still a serious amount of uncertainty around esports betting. There has been no specific authority responsible for esports betting and offshoots like skin betting. This could lead to roadblocks if they decide to legislate later. There is still hope that the government could change their approach to esports betting, but until then German bettors will still have to access it through other EU sites.