German Regulation Likely to Drive Players Offshore

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German Regulation Could Drive Players to Offshore Poker Sites

New online gambling regulations in Germany are likely to drive players offshore, which will mean more money on the tables at offshore poker sites.

Germany is the biggest country in Western Europe. Despite being around seven-eighths the size of California, it has a population more than double the Golden State. Players such as Fedor Holz, Dominik Nitsche, and Ole Schemion originate from Germany, and the country has produced two WSOP Main Event winners in Pius Heinz (2011) and Hossein Ensan (2019).

All of these players developed their poker skills online before hitting the international stage; but, the next generation of German online poker stars is being denied the opportunity to learn the game on sites such as PokerStars, Party Poker, and 888Poker due to tough new online gambling regulations scheduled to come into force next year.

The Background to the New German Online Gambling Regulations

Germany is a country like the United States inasmuch as it has sixteen “Lander” (states) which can make their own regulations; although some activities are controlled by the federal government. For example, each state has the right to license brick-and-mortar casinos, but horserace betting is regulated at federal level (as are physical slot machines for some reason).

Only one German state – Schleswig-Holstein – has enacted legislation to regulate online gambling. Elsewhere in Germany, online gambling has been illegal since 2008 – although there has never been any enforcement action taken. However, since 2012 the sixteen Lander have been working on an Interstate Treaty which will come into force next year.

How the Interstate Treaty Affects Online Gambling

The treaty standardizes online gambling regulations across the country. From 2020, operators will need to apply for licenses to provide online gambling services to German citizens, and these licenses only cover online sports betting. Once an operator is given a license, it has to stop all non-sports betting activity. That means no online casinos and no online poker.

There is some discussion about online casinos and online poker being added at a later stage, so the likelihood is that online operators such as PokerStars, Party Poker, and 888Poker will comply with requirement to exclude German players from their online poker platforms, especially as failing to comply could jeopardize their online gambling licenses in the United States.

So, Déjà vu in a Couple of Years? Online Poker Will Return?

Not necessarily. Although the majority of operators will undoubtedly want an online casino license, nobody knows yet whether the German online poker market will be ring-fenced (as it was in France, Spain, Italy, and Portugal), allowed to join a pan-European network, or released back into worldwide pool. Considering what has happened to the regulated market in the United States, some operators may decide the cost of licensing doesn´t justify providing a service in Germany.

Furthermore, the Interstate Treaty imposes a maximum customer spend of €1,000 ($1,115) per month on sports betting. That´s spend, not loss. If the same rule was applied to online poker, most cash game players would max out their spend limits on the first of the month. I imagine spend limits would be applied to online casinos, so I can´t see why they wouldn´t be applied to online poker – which would kill everything except micro-stakes action and low buy-in tournaments.

Plenty of Opportunities for Orphaned German Poker Players

As we saw during the years when online poker was banned in Portugal, orphaned poker players head to offshore sites to play there. Germany has a population eight times the size of Portugal, so the exodus will be significant. Not only that; but, if the German authorities subsequently allow sports betting licensees to provide online poker, it may not be the case German poker players come rushing back.

Consequently, the next few years could be the new golden years for online poker at US facing online poker rooms, as players from Germany flock to offshore sites. The subsequent growth in player traffic and tournament guarantees should have a knock-on effect around the world, and it may be the case players from other jurisdictions abandon their domestic operators to play where the money´s at. Let´s hope so.