New legislation in Germany has caused its online poker market to be thrown into a state of upheaval as the government implements a completely new regulatory system. As a result, several major operators are temporarily leaving the market. Some are leaving for good.
Before the new framework, most online poker sites were functioning as unlicensed operators that were tolerated by the government. Gambling winnings were taxed heavily, causing many high-profile German poker pros to leave the country, but there was nothing illegal about gambling online.
German authorities have since decided to move from a hands-off approach to a much stricter one with more compliance needed from the country’s operators.
A “tolerance policy” was agreed upon by the German government on Sept. 10, but it wasn’t until the end of the month that the policy laid out specific guidelines for sites to follow. Operators were given until Oct. 15 to comply with the new regulation, giving them just over two weeks to sort comply.
There are several new regulations, but only a few that apply to poker. Sites will need to implement rigorous know-your-customer [KYC] requirements that will require players to fulfill additional verification requirements to confirm their identities. Typically, KYC requirements are imposed by governments on industries where money laundering could theoretically take place.
According to multiple gambling outlets, players will only be allowed to play a maximum of four tables at once, they will not be allowed to choose their table or seat, the deposit limit will be capped at €1,000 per month and there will be a “panic button” that will instantly self-ban a player for 24 hours.
The seating restrictions and table limits are in line with what some American-facing poker sites have done to sustain the overall health of the ecosystem. It seems unlikely that the German government is worried about that, however.
Ladbrokes, Redbet and Betfair have opted to leave the market entirely and it’s anticipated that Winamax will exit as well. PokerStars and Phil Galfond’s Run It Once are temporarily exiting the space until the companies have finished complying with the new rules. According to a tweet from the Run It Once account, the company plans on being out of the market for 1-2 months.
Unibet, 888poker and GGPoker are making changes to their platform to comply but did not make any statements about leaving the market. 888 is building out an entire new platform for German customers that will launch on Nov. 2.
With companies exiting the market, German players will have fewer options. The regulations will be felt on both ends, however, as the sites that decide to stay and comply will watch its revenues drop in the coming years.
“The overall impact of the Tolerance Policy will be to reduce revenue across the German market,” wrote GVC Holdings, owner of several European-facing poker sites operating in Germany, in a press release.