Internet gambling and the new Interstate Gambling Treaty 2021
Gambling is strictly regulated. Public gambling is subject to a so-called prohibition with reservation of permission, i.e. it is generally prohibited, but official permits can be issued. Gambling without official permission is subject to the criminal offenses of §§ 284, 287 StGB and will generally be void under civil law due to a violation of § 134 BGB. The requirements for conducting games of chance and other framework conditions are also regulated in the Interstate Treaty on Gambling (GlüStV) and in the implementing legislation for the GlüStV in the various federal states. In Baden-Württemberg, for example, the State Gambling Act (LGlüG) applies.
In March 2020, the state governments adopted a new GlüStV (hereinafter referred to as "GlüStV-2021"). However, this is not yet effective. The new GlüStV-2021 must first be ratified by at least thirteen federal states by March 31, 2021. Saxony-Anhalt must also have ratified it by 30.06.2021. If this happens, the new GlüStV-2021 will enter into force on 01.07.2021. The implementing laws of the federal states may still need to be amended. The negotiations on the GlüStV-2021 were led by the government of North Rhine-Westphalia, so the currently known documents are available here.
The reason for the mandatory ratification by Saxony-Anhalt is, in particular, a new, central "Joint Gambling Authority of the States", which is to be based in Saxony-Anhalt. This new gambling authority will be responsible for the supervision of Internet gambling in particular.
When does gambling occur?
A gameof chance exists if a fee is charged for the chance to win a prize and the decision to win depends entirely or predominantly on chance. In any case, the decision to win depends on chance if the uncertain occurrence or outcome of future events is decisive.
Conversely, this means that a game of chance cannot be assumed if it depends - at least primarily - on the player's skills, knowledge or level of attention (in which case it is a game of skill ).
According to the prevailing opinion, it is generally assumed that a game of chance only exists if the stakes are not negligible. Based on various court decisions (e.g. BGH, para. 69 - "Sportwetten im Internett II") and according to the considerations of Section 58 para. 4 in conjunction with Section 8a of the Interstate Broadcasting Treaty (RStV), this limit may be EUR 0.50. Although all other requirements are met, a game of chance does not exist if the stake does not exceed EUR 0.50.
In principle, the GlüStV only covers public games of chance. Non-public games of chance are therefore not covered by the GlüStV - or at most with regard to individual aspects. Public gambling is deemed to exist if there is an opportunity for a larger, non-closed group of people to participate or if gambling is habitually organized in clubs or other closed societies.
Prohibition of online gambling under the current GlüStV
In the Interstate Gambling Treaty of 2008, gambling on the Internet was completely prohibited. According to a decision by the Federal Constitutional Court, this ban was permissible. In the (still) current GlüStV from 2011, gambling on the internet is still prohibited in accordance with Section 4 (4) GlüStV as follows
"Organizing and brokering public games of chance on the internet is prohibited."
However, exceptions are now provided for under Section 4 (5) GlüStV as follows
"By way of derogation from paragraph 4, the federal states may, in order to better achieve the objectives of Section 1, permit the self-marketing and brokering of lotteries as well as the organization and brokering of sports betting on the Internet."
According to the current legal situation of the GlüStV, there is therefore a blanket ban on gambling on the Internet. However, the individual federal states are permitted to adopt different regulations.
Baden-Württemberg has made use of this option: According to Section 2 (2) LGlüG of Baden-Württemberg, the following, for example, may be permitted by the authorities as an exception to the ban in Section 4 (4) GlüStV: "the self-distribution and brokerage of lotteries [...] on the Internet". Certain requirements must also be met.
A special situation existed in Schleswig-Holstein: even before the current GlüStV, Schleswig-Holstein had passed a comparatively liberal law in 2011 and, based on this, issued permits for online gambling with a time limit of six years. Schleswig-Holstein did not follow the regulations of the other federal states at the time in order to achieve a realignment of gambling law "which makes the sale of lotteries - while maintaining and stabilizing an event monopoly - much easier". In 2013, Schleswig-Holstein joined the GlüStV after a change of government, meaning that no further licenses for online gambling could be issued. The previously granted licenses ended - as far as is known - in 2018 and 2019.
Example: Raffles, draws and lotteries
The GlüStV distinguishes between different forms of gambling. A game of chance in which a number of people are given the opportunity to win money according to a specific plan for a specific fee is a lottery. The regulations on lotteries also apply if items or other monetary benefits can be won instead of money; this is considered a draw. As a rule, this includes raffles.
State lotteries of the federal states are permitted, see Section 9 (2), (3) LGlüG. Originally, there was an extensive state monopoly on events. Due to decisions by the Federal Constitutional Court and the European Court of Justice, this was partially weakened. Since the GlüStV came into force in 2012, it has also been possible for private individuals to organize certain lotteries (and draws), as set out in Section 10 (6) GlüStV. However, this requires a permit and, pursuant to Sections 10 (6) and 12 GlüStV, the permit may only be issued in accordance with the third section of the GlüStV. The federal states are also responsible for issuing the permit. This is seen as a conflict, as ultimately one competitor (a federal state) must grant another competitor (the private player) a license for the competitive activity.
According to the third section of the GlüStV, private operators may be permitted to organize "small lotteries" and "lotteries with low risk potential". However, there is a state monopoly on the organization of "large lotteries". Strict framework conditions apply to "small lotteries" and "low-risk lotteries", which are possible for private individuals. In particular, it is necessary to use the winnings largely for charitable purposes.
Prohibition of advertising for gambling
According to Section 5 GlüStV, advertising for games of chance on the Internet is prohibited as follows:
"Advertising for public games of chance is [...] prohibited on the internet and via telecommunications systems. By way of derogation, the federal states may permit advertising for lotteries and sports and horse betting on the internet [...] in order to better achieve the objectives of Section 1."
According to Section 284 (4) StGB and Section 287 (2) StGB, advertising for public gambling or public gambling is a criminal offense.
According to Section 5 Para. 3 GlüStV, individual states can provide for exceptions to the general ban. There is therefore a so-called "Advertising Directive" as an administrative regulation that governs the permissibility of such advertising. North Rhine-Westphalia is centrally responsible for advertising on the internet.
The new Interstate Gambling Treaty 2021
As outlined above, a new GlüStV 2021 has been adopted, but has not yet been ratified and is not yet in force. A key amendment to the GlüStV-2021 concerns the licensing of certain online games of chance.
According to the GlüStV-2021, the following new forms of gambling are to be distinguished:
Virtual machine games are replicas of terrestrial machine games offered on the internet.
Online casino games are virtual replicas of banker games and live broadcasts of a terrestrial banker game with the option to participate via the Internet.
Online poker is a variant of poker without a banker, in which different natural persons play against each other at a virtual table.
The new GlüStV-2021 therefore contains a significant change to the current ban on online gambling. Instead of the blanket ban on public games of chance on the internet, Section 4 (4) GlüStV-2021 will now apply in a more differentiated manner:
"A permit for public games of chance on the internet may only be granted for the own marketing and brokerage of lotteries, the organization, brokerage and own marketing of sports betting and horse betting as well as the organization and own marketing of online casino games, virtual machine games and online poker. In addition, the organization and brokering of public games of chance on the internet is prohibited."
Conclusion
Games of chance are strictly regulated, both under the current legal situation under the GlüStV and under the expected new legal situation under the GlüStV-2021. In particular, the public organization of a game of chance without official approval constitutes a criminal offence. Even small stakes above the limit of EUR 0.50 are sufficient to constitute gambling. However, the new GlüStV-2021 will lead to a certain liberalization of the possibilities on the Internet in particular if the GlüStV-2021 is ratified in time and can therefore enter into force. Nevertheless, some key areas will remain subject to extremely strict regulations or even a state monopoly, e.g. large lotteries and games of chance.