The current legal uncertainty of sports betting in Germany and its consequences for the offered payment methods

After more than eight long weeks, Germany’s Bundesliga returned to action last month. To the great relief of not only sports fans all over the world but also of the worldwide gambling industry which has faced its toughest period in ten years. The German market especially has been impacted very hard with a revenue loss of up to 90 percent for some bookmakers as reported by several big newspapers in the country.

However, the restart of the Bundesliga brings not only focus to the amount of placed bets but also to the current legal uncertainty the gambling world in Germany has been facing over the last years. The legal situation of betting in Germany is still based on the “Glücksspieländerungsstaatsvertrag” from 2012 which is not setting clear rules for online bookmakers. While betting has always been legal through the official state lottery monopoly, online gambling provided by private bookmakers has been in an unclear state in the last years. Most of the bookmakers are operating with licenses from Malta, Gibraltar or Curacao and argue that, based on EU freedom of services principles, they can provide their services to German customers. Others are operating under the betting licence of the German country “Schleswig-Holstein” which they interpret as a German license. An official German betting licence system doesn’t exist yet, however, the government is planning to introduce an official German licence in 2021.

This difficult situation between legal regulations and illegal activities causes much uncertainty for the market. One of the consequences is that several payment providers have started to withdraw from their cooperation with specific bookmakers. The latest example of this uncertainty is the end of the partnership of Mastercard and VISA with brands like Comeon and Mobilebet. In a newsletter, Comeon informed their partners that both credit card brands have stopped their service in Germany for gambling sites with immediate effect due to regulative government restrictions. Last year several bookmakers removed PayPal from their list of payment methods which had a huge effect on the market. Bookmakers with PayPal are now one of the biggest searches when it comes to bookmaker comparisons in Germany.
Despite the uncertainty surrounding the German licensing process, more than fifty betting companies have already applied for the new German sports betting license 2021. If the licensing process will be successful, it’s very likely that it will also have a positive influence on the current difficult situation for the online payment providers in the German gambling market.

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