Germany’s Interstate Treaty review: Is meaningful reform in sight?

How would you assess the review of the 2021 Interstate Treaty on Gambling so far? Does it appear to be a genuine evaluation of whether the framework is working, or more of a formal exercise? 

Expectations should be kept in check. The evaluation examines certain aspects of the Treaty, principally whether specific provisions effectively combat the black market. Key subjects under review include the cross-operator deposit limit regime, enforcement tools such as payment blocking and IP blocking, advertising restrictions and product-specific rules such as the stake limit for virtual slot games. However, the factors that most critically undermine the competitiveness of the licensed market, like product restrictions, advertising limitations and above all the fundamentally misconceived stake-based tax, are receiving insufficient attention. 

What type of regulatory changes, if any, do you expect to result from the evaluation? Do you anticipate broader changes or more targeted adjustments? 

Modest, targeted adjustments are more likely than wholesale reform. That said, poorly drafted provisions could be replaced with market-appropriate formulations. For example, the introduction of type-approval or certification procedures for virtual slot games, which would considerably streamline the current cumbersome game-by-game approval process, could be an important step. A clearly defined framework permitting alternatives to bank guarantees as security deposits would also be important. The political will for a fundamental overhaul appears limited, at least for now.