Germany to issue first IP blocking order to Lottoland

Germany’s new regulator, the Glücksspielbehörde, has asked internet service providers to initiate their first blocking order under the country’s new regime, against lottery betting operator Lottoland.

The body took over responsibility for enforcement against unlicensed gambling on 1 July, ahead of it taking control of all aspects of regulation in Germany on 1 January, 2023.

Last month, it revealed early details of its plans to take action, promising to use payment and IP address blocking to stop unlicensed businesses from taking bets.

Now, the regulator said it has already taken steps to block the sites of certain operators, specifically mentioning lottery betting business Lottoland.

The Glücksspielbehörde said that the lottery betting sector in general risked confusing players about the nature of the product they are using, and noted that lottery betting is not permitted under the country’s Fourth State Treaty on Gambling.

“The network of companies, which operates under the name Lottoland, has been offering illegal gambling for years,” the regulator claimed. “This offer is particularly precarious as many players believe they are entering a lottery game at Lottoland. However, this is not the case” 

In terms of payment blocking, meanwhile, the regulator noted that the state of Niedersachsen had been able to block payments before the Glücksspielbehörde took over. However, board member Benjamin Schwanke said that it hoped the effectiveness of payment blocking could be enhanced as the new body would have more power to exert pressure on payment providers.

“We are interested in cooperation with the payment service providers, but we can also initiate appropriate administrative procedures if the payment service provider does not meet its obligations, and we have effective instruments for enforcing orders,” Schwanke said.

Meanwhile, Glücksspielbehörde board member Ronald Benter pointed out that the regulator can also report operators to tax authorities, forcing them to pay tax on the custom they receive from Germany. 

“The reporting of gambling providers to the responsible tax authorities is one of the most

effective instruments for combating illegal gambling on the Internet. Because with tax

debts, the probability of obtaining a permit in the future is almost zero,” Benter said. “If you have tax debts in Germany, you also risk being denied permits abroad. Licenses that have already been granted can also be revoked.”

Currently, only a small number of operators are licensed to operate sports betting and online casino, and those that are face strict rules  including a €1 stake limit for slots. In addition, operators must pay 5.3% of their slots turnover in tax.

As a result, the licensed online sector has faced a large degree of competition from businesses without licences.

Only three operators – Mernov, Tipwin and Mybet – are currently licensed to offer online slots, and none to offer online poker, though authorities in Sachsen-Anhalt said that nine more licences should be on the way.

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Author: Raymond Fleming