Licensed German operators have been issued with warning by the country’s regulators. The authorities have warned the operators against online gambling or poker. Failure to stop these operations, the operators may lose their business licenses.
The Darmstadt Regional Council representing the state of Hesse provided a letter on this warning. The letter reaffirmed the prohibition orders against operators who will not apply for a license when the regulation is implemented in January.
Conversely, the letter came after the council had received a number of press releases that requested for the licensing process to be delayed.
According to the AffiliateInsider.com, what the press releases were requesting for was more time which was required since there was lack of transparency during the introduction of the said regulations.
Currently, Germany is reforming its gambling regulations. The country intends to implement the third amendment of the gambling State Treaty. A set of interim laws are anticipated to come on January 1st 2020. These laws will be effective until June 2021 after which a regulatory framework will be formed.
The Council’s released statement specified that the State authorities will not tolerate operations without licenses. After the third amended State Treaty is implemented, sports betting operators without licenses will be sanctioned.
With these regulations, Germany’s iGaming sector has become sensitive. Stricter regulations had been implemented in other areas. For instance, in the beginning of the year, PayPal refused to accept online casino payments. This is a direct blow to those operators and players insisting to stay on.
Once the changes have been set in motion, revenue was expected to be adversely affected. LeoVegas shared that its revenue from the German online platform felt the impact. This decline was by twenty to thirty percent to be precise.
In monetary terms, the clampdown had cost LeoVegas a total of one million to one and a half million euros. According to the operator, PayPal’s crackdown was what affected its Q3 revenue the most.
LeoVegas Chief Executive, Gustaf Hagman referred the situation as a greater complexity after the Q3 results had been announced. For the operator, the impact cut across several of its main markets.
Apart from the Germany’s market decline, the operator reported year-on-year increases in other markets. Hagman said that despite the challenges presented by the regulations, his company was able to succeed in its other markets.
The full impact of the current warnings in Germany is yet to be observed. GVC Holdings shared that it had aimed to use the Germany market revenue as a means to bring back its growth after it had suffered losses in the UK. August had been a tough for the company.
The Regulus Partners were also critical of the new regulations. According to them, the new regulations would bring the country’s sports betting revenue to a 70% decline. That is if the treaty was to be implemented.
Schleswig-Holstein is the only Germany state that provides regulated online gambling. Players in the state can still be punished if they place their bets outside the European Union.