Although the provision of almost any kind of online gambling to German players is technically forbidden under German law, Germany is one of the biggest online gambling markets in the world. Enforcement of the prohibition stipulations is difficult for gambling authorities: Authority actions can be attacked before the competent courts, and there are valid arguments that German gambling law contradicts European Law, rendering German Law inapplicable. Accordingly, for almost a decade there has been a game of cat-and-mouse going on between the German gambling bodies and private providers, leading to a number of interesting legal incidents in 2014.

 European Court of Justice ruled on German Gambling Law System

Of uttermost importance was the decision “Digibet and Albers”, C-156/13 of 12 June 2014 by the European Court of Justice (“ECJ”) on a key question of the compliance of German gambling law with EU freedoms: In 2012, the small Federal State of Schleswig Holstein had introduced a very liberal Gambling Act, under which more than 50 licenses for the provision of online gambling and sports betting had been granted (see The Act was withdrawn in 2013, but the licenses granted are valid until 2019 at least. Many scholars assumed that this deviation in Schleswig Holstein from the strict requirements established by the Interstate Treaty on Gambling 2012 (“ISTG”) in the other federal states alone would lead to an unlawfulness of the ISTG provisions. This view has been neglected by the ECJ.  

Still, this does not mean that the gambling law situation in Germany has been considered lawful by the ECJ. According to the court, the existence of two different gambling law systems for a short period of time alone does not lead to an incoherence and respectively inapplicability of the strict German regulations on the prohibition of gambling. However, the ECJ emphasized that it only ruled on the very specific Schleswig Holstein question and not on the lawfulness of German gambling law as a whole. The court explicitly demanded that local courts will have to check in detail whether German gambling law fulfils the strict requirements set up by European law. The “Digibet and Albers” matter has been referred back to the German Federal Supreme Court, which will now have to decide the case based on the ECJ ruling.

Difficult Sports Betting Licensing Proceedings

Anyhow, the “Digibet and Albers” decision will not be the last ECJ decision on the legality of German gambling law. The Criminal Court of Sonthofen has commenced proceedings for a preliminary ruling before the ECJ on 11 July 2014 (matter “Ince”, C-336/14). In particular, the Criminal Court of Sonthofen doubts that a small liberalization of the German gambling market which was introduced mid-2012 – a sports betting licensing procedure enabling up to twenty private providers to obtain a license to offer online and offline sports betting – is in compliance with European law. In the opinion of the court, the licensing process is very badly organized and not transparent – a view that, according to a recent respective statement, seems to be shared by the European commission. Indeed, although sports betting licenses could theoretically have been granted already in 2012, until now no single license has been issued. Even the finalization of the administrative procedure and the publication in September 2014 of a list with twenty providers which are deemed to receive a respective sports betting license did not lead to a license grant; a number of interim proceedings prevent the authority from actually handing out the licenses. At what point in time the licenses will finally be granted is uncertain. It is not likely that this will be the case before autumn 2015 – very likely providers will have to wait until 2016.

Court Victories of Private Providers

While administrative courts generally tended to uphold prohibition orders issued against private providers of online gambling services in the past, 2014 saw quite a number of court decisions which favoured private providers. According to these court decisions, a number of prohibition orders that were issued under the old Interstate Treaty on Gambling of 2008 can no longer be considered enforceable for a number of reasons (see inter alia Administrative Court of Ansbach, ruling of 28.1.2014 as well as various settlement agreements in this regard before the Higher Regional Administrative Court of North Rhine-Westphalia and the Higher Regional Administrative Court of Bavaria). These courts did not primarily focus on possible non-compliance with European law, but rather on the bad reasoning with respect to the choice of the attacked gambling providers, which made the orders unlawful.

New VAT Provisions

Starting from 2015, VAT provisions for online casino providers have changed significantly (see in more detail While, until the end of 2014, online casino providers with place of establishment outside of Germany but inside the European Union only had to pay VAT according to the provisions of their country of origin, from 2015 on German VAT will be imposed if online casino gambling services are provided to German players. This is likely to lead to significantly raised costs of European gambling providers.

Taxation of Poker Players

With respect to Poker, the Financial Court of Muenster issued an interesting decision on 15 July 2014 (which is in line with previous decisions of other financial courts), according to which professional Poker players shall be imposed with income tax regarding their winnings. The decision is very much disputed as such income tax may only be levied if the financial authorities deem that Poker is a game of skill rather than a game of chance, which is denied by the gambling authorities and most administrative courts. Accordingly, while gambling authorities and administrative courts generally regard Poker as (prohibited) game of chance, tax authorities and financial courts consider – at least with respect to experienced players – Poker as a game of skill in order to be able to collect taxes.

Criminal Conviction of a Player

Another strongly disputed decision has been issued by the Criminal Court of Munich on 26 September 2014. In this decision, the Munich court sentenced a player (and not a provider) to a fine and claimed that the player had committed a crime by participating in online Black Jack games. Even though the participation as a player in online gambling is – from the wording of the respective criminal law stipulation – indeed a criminal offence, this seems to be the first time that a player has actually been sentenced. Nonetheless, the court ruling is not likely to start a new wave of player convictions. It has not been the result of planned proceedings by the criminal prosecutors but rather an “accident”, as the player was initially charged with social security fraud and defended himself by claiming that he had gained the money from online gambling, which led to his conviction for participation in unlicensed games of chance.

Also, the decision of the Criminal Court of Munich includes a number of legal inaccuracies and has been appealed; it is rather unlikely that it will stand. Other criminal courts do not seem to share the strict opinion of the court of Munich. With respect to the services of gambling providers, for instance, the Criminal Court of Kempten judged on 28 April 2014 that the brokering of sports betting cannot be punished at the moment due to legal uncertainties from a European law point of view.


Also in 2015, courts will be kept busy with to German gambling law matters. The ECJ will rule on the legal impacts of the sport betting licensing system, and so will a number of German courts. Even if licenses are finally granted, we are likely to see an increase in litigation rather than a decrease, as such licenses will be attacked in main proceedings.

In addition, the German Federal Supreme Court will have to decide the “Digibet and Albers” matter; a respective judgement is likely to provide ammunition that can be used in on-going proceedings before lower German courts. In consequence, the German gambling market is far apart from granting legal certainty in near future.