Germany starts payments blocking on online gaming
State of Lower Saxony blocks payments from an unnamed international payments provider in a move designed to warn other providers
The German state of Lower Saxony has banned an unnamed international payments provider from facilitating all payments related to online casino in the country, in a move designed to clamp down on the vertical as a whole.
Lower Saxony is the relevant authority for payment for illegal gambling in Germany, meaning the blocking decision will apply across all 16 German states.
The Lower Saxony minister of home affairs and sports, Boris Pistorius, said the move should send to a message to other payment providers to stop facilitating gambling transactions.
“We are signalling to and expect other payment providers to reorganize their business processes in connection with illegal gambling, if they have not done so already,” Pistorius said.
“Online casino is no triviality and is prohibited by the Gambling Treaty. In the meantime, however, it is a billion-euro market where the actors are companies based abroad, beyond the reach of the German authorities.”
According to a Lower Saxony press release, it is currently in contact with a number of foreign payments companies, with several already agreeing to suspend payments.
“The successful measures of some payment service providers show that an effective approach is quite possible,” Pistorius added.
The Saxony release points out that online casino has been found by the courts to be illegal but blocking measures on the activity itself have been unsuccessful.
The ruling also applies to online poker and secondary lotteries.
Saxony said the German online gaming market, excluding sports betting which is permitted under the Interstate Treaty, was worth around €2bn in 2017.
The Saxony announcement is somewhat at odds with recent operator commentary, with the likes of GVC saying it expects online casino regulation by 2021.
DLA Piper laywer Christoph Engelmann told EGR: “Generally speaking this is bad news not only for the operators but also for the payment service providers who are now targeted next after the operators and their advertising partners (who were targeted last year).