New German regulator butts heads with Lottoland

Germany’s newly-established regulator or Glücksspielbehörde is keen to act under the Fourth State Treaty on Gambling, the underlying law that is now in force and allows the watchdog to monitor whether the industry plays by the rules. The first one to come under fire is Lottoland, a brand that has been a near-fixture in the lottery space in Germany.

However, the regulator insists that offering lottery betting products are actually not legal. The argument here is that Lottoland is "misleading" consumers into thinking they are betting on official lottery products run by Germany. However, Lottoland uses its own products.

As such, Lottoland is in effect operating without the necessary permit. This has prompted the regulator to issue its first ISP ban, a practice that is mostly attributed to Australia which has hand-picked offending operators and banned them with the assistance of internet companies. Lottoland has responded that it will pursue further action against the regulator and called the move unlawful.

ISP bans are now happening in Germany it seems, with the regulator issuing a public reprimand and its motivation for the move. According to the watchdog, Lottoland and its network of companies have been running a business "illegally." The statement published on the regulator’s website is the first time since it was established and came into effect on July 1 that the watchdog butted heads directly with an operator.

Benjamin Schwanke, a member of the board, has assured that the regulator has the means to compel everyone to assist the watchdog. As per Schwanke’s own admittance, fines are not as efficient, even though the regulator can now apply penalties of up to €500,000. But since a company doesn’t really operate with offices in Germany, it’s hard to make these fines efficient.

However, Glücksspielbehörde would much rather work with services such as payment providers, for example, and pass quick restrictions on transactions towards websites that are deemed illegal by the watchdog. This is efficient, the board member says, and yields results.

The watchdog is ready to further collaborate with tax authorities to exert further pressure and ensure that companies are not stilting rules in Germany when it comes to the gambling sector.

Ronald Benter, another member of the board, is equally committed to upholding the highest standards for the industry, but also ensuring that operators are paying their tax obligations. He argues that any tax debtor in Germany could be refused business permits abroad as the German tax authorities can actively pursue to inform counterparts about issues at home.

This re-regulation has come with a very strict new set of rules that has left only a trio of websites, to name Mybet, Mernov, and Tipwin, as the only licensed parties that can currently offer slot gaming in the German market. Meanwhile, Lottoland Group has responded to the request for bans and said that the regulator is breaching European Union law. As a result, Lottoland will resort to all legal means in order to counteract the regulator.

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