Key takeaways from Hesse’s informational meeting on sports betting licenses in Germany

On 13 August 2019 the competent gambling licensing authority of Hesse, the Darmstadt Regional Council, held an informational meeting on the upcoming 2020 sports betting licensing procedure in Germany. This was an opportunity for stakeholders in the sports betting industry in Germany to discuss questions about the recently published minimum licensing requirements directly with the authority. DLA Piper attended this meeting and here are our key takeaways:

General

• The authority is confident that the intended amendments to the State Treaty on Gambling (Glücksspielstaatsvertrag = GlüStV) will be ratified by all 16 German states until 31 December 2019 to ensure the beginning of the licensing procedure on 2 January 2020. The transposition process has already started in all states.
• License applications will be processed on a “first come, first served” basis – but the authority will not start to review the applications earlier than 2 January 2020.
• Every applicant has to submit a new full set of licensing documents in accordance with the minimum licensing requirements – even if the operator has been found to fulfil the licensing requirements in the 2012 procedure or if it is tolerated in Schleswig-Holstein. However, existing documents can be reused if they are still up-to-date.
• The authority intends to not only confirm the receipt of a license application, but it will also confirm the eligibility of the documents to be examined and – if needed – it will request to submit missing documents.

Responsible gambling

• One of the main parts of the licensing requirements is to submit a social concept – that is also one part that the authority thinks is the most difficult. The social concept needs to specify concrete responsible gambling measures to be implemented in the company. This includes the exclusion of underage and blocked players, measures to prevent addiction, dealing with problematic gambling behaviour and training of staff.
• The social concept needs to deal directly with the specific company and the sports betting offers it provides. Quoting general studies or scientific findings about gambling addiction in a “general section” of the concept is not necessary.
• Operators are required to exclude blocked players by integrating the central blocking system OASIS at the time of granting of the license. For the authority it is sufficient to cross-check the player against the blocking system with each login – this means that a cross-check will not be necessary with each bet that is placed.

Operating different brands

One sports betting operator may operate different brands and websites under one license. The details of this need to be explained by the operator in the sales concept and in the security concept.

Additional requirements

• The betting program (details of the specific betting offers the sports betting operator intends to provide) is not part of the license application but it needs to be submitted to the authority after granting of the license.
• The license will have several collateral clauses that will deal with further requirements of the operator. This includes if bonuses and discounts will be allowed (which needs to be explained in the sales concept), how the social concept needs to be scientifically evaluated and it also includes reporting obligations of the operator to the authority.
• Advertising on TV and on the Internet needs an additional advertising license that is granted by another authority – the district government of Düsseldorf in North Rhine-Westphalia.
• The licensee shall provide interfaces for checking all game processes in real time. This will be the last step of the authority to check the compliance of the operator if there are “irregularities” in the supervision of the operator. The authority intends to only use this if all other methods of gathering information fail – including asking the operator to submit documents. At the moment the authority does not have exact technical specifications on how to deal with this requirement.

Dealing with unlicensed operators

At the moment the authority monitors around 160 sports betting operators in Germany. It expects all of them to submit a license application. If not, the authority will request the operators to submit an application within a specified deadline. If an operator does not submit complete licensing documents upon that request, the authority will interdict the operator’s sports betting business in Germany.

Next steps

Submitting an excellent application will speed-up the licensing process. This includes not only complete licensing documents, but also a content of the documents that complies with the regulatory requirements.

The authority intends to update its website with FAQ and new requirements and documents for the licensing procedure from time to time. A substantial update is to be expected until the end of the year. This will include a form with all necessary declarations that the applicant just needs to sign (instead of drafting the declarations on his own). Further questions about the licensing procedure may be discussed with the authority (in German).

This article originally appeared on our MSE Passle.

https://blogs.dlapiper.com/all-in/2019/08/13/key-takeaways-from-hesses-informational-meeting-on-sports-betting-licenses-in-germany/