Germany’s banks have received fresh warnings from government authorities that they are not allowed to process payments for international online gambling operators.
On Friday, German public broadcaster NDR reported the Lower Saxony Ministry of the Interior had sent letters to five German banking industry associations reminding them of their obligations not to facilitate payments between German gamblers and internationally licensed online gambling sites.
Germany is currently moving towards a more liberal online gambling regulatory regime but any new gambling treaty is still at least 17 months away. For the time being, only online sports betting is permitted, and only for operators that have submitted applications to the Ministry of the Interior and Sport in the state of Hesse.
German banks were forced to tighten their oversight of online casino payment processing a couple years ago following an exposé that targeted a number of major financial institutions. More recently, the government in Lower Saxony pressured Paypal to stop acting as a go-between for German gamblers and online casinos, leading Paypal to cut off those payments a few months later.
This week’s letter to the banks references the Paypal issue and says “further prohibition orders are expected to follow.” The banks were reminded that the current prohibition “applies directly and obliges the payment service providers to take appropriate, independent measures.”
AFFILIATES FRET OVER NEW TREATY DRAFT
While the draft agreement on a new Federal Gambling Treaty would eliminate the prohibition on online casino and poker products, it contains numerous clauses over which operators have expressed alarm, including severely restricted in-play sports betting, monthly deposit limits and a €1 maximum stake on online slots spins.
This week, online gambling affiliates were the ones crying foul after discovering wording that would prohibit German licensees from using “affiliate links” or making payments to marketing partners based on betting turnover or any form of stake-dependent remuneration.
PLAYTECH SEEKS GERMAN BETTING LICENSE
Among the companies that have so far filed sports betting license applications in Hesse is HPYET, which is owned by Playtech, the online gambling technology provider (and major B2C operator in certain markets, particularly Italy).
HYPBET launched retail and (Malta-licensed) online betting operations in Germany and Austria in 2017 as Playtech deepened its sports betting involvement through its BGT Sports unit. Michael Lessig, HPYBET’s German managing director, called the Hesse license application “a big milestone in our still young company history.”
Lessig said his company looked forward to “a regulated market environment and fair competition with clear rules,” while cautioning that Germany’s rules must be “in line with the market” if the government wants to capture a majority of the current business going abroad.