Germany's impending iGaming deposit cap ruling is at a turning point.

Dr. Joerg Hofmann, Senior Partner at Melchers Law, cautioned that the appropriateness of SCHUFA-G has left the subject of deposit limitations in the German iGaming sector in limbo.

With the use of SCHUFA-G, German online operators can evaluate a player's financial situation and decide whether to raise the cross-operator monthly standard deposit limit under the State Treaty on Gambling (GlüStV) from €1,000 to €10,000.

The interim approvals for higher deposit limits expire at the end of the year, therefore Germany's deposit limitations were a major topic of discussion during a recent Gaming in Germany webinar by Gaming in Europe titled "The German iGaming market in 2027 and beyond."

Administrative court rulings, however, have raised severe concerns about SCHUFA-G's applicability, claiming that it evaluates a player's creditworthiness but not their assets, wealth, or financial situation. As a result, courts have deemed it to be illegal and inappropriate; consequently, a substitute must be established.

Hofmann stated at the Gaming in Germany webinar that the administrative board would also be involved in this decision, as the German regulator Gemeinsame Glücksspielbe fürde der Länder (GGL) cannot make it on its alone. They've already had two meetings, but they haven't come to a decision about how to proceed. The following meeting is scheduled on November 18.

"They have to make a decision then, because if they don't, there's a risk that the current permissions won't be extended or renewed, and then we would go back to a standard limit of €1,000 for every single player, cross-operator based, aside from those who have lower limits set by themselves," Hofmann stated. 

The administrative board is debating various options, including open banking procedures similar to Kontoblick. Additionally, I believe the topic of document uploading is being discussed. We don't know the outcome of the meeting, but this might be evidence of income or other comparable documents that show the application or the athlete deserves and can afford a greater limit. It is unpredictable.

Germany
Picture: Shutterstock/Juan Garcia Hinojosa
Dr. Nepomuk Nothelfer, an attorney at Melchers Law, and Christian Heins, the founder of the European Gambling Gathering (EGG), joined Hofmann on the webinar, which was moderated by Gaming in Europe Content Director Jeroen Laemers.

Heins pointed out that the EGG has been contacting Big Tech companies to provide proof of its presence on their platforms in an attempt to combat black market advertising. In the meantime, Nothelfer investigated the possibility of esports betting being legalized in Germany in the near future.

Operators are aware that restricting deposit limits may cause players to migrate to the black market, but whether or not important German decision-makers are aware of this risk is a different matter.

Hofmann gave operators some guidance on how to stay on top of the evolving situation before the end of the year with regard to the future of deposit restrictions in the market. 

"If operators haven't already, it makes sense to apply for a new increase for new permissions as soon as possible, to give GGL enough time after the administrative board's decision has been rendered and communicated, to ensure that all these permissions and administrative acts will be served on time, not to lose the possibility of increased limits," he stated. 

"I would see a large migration to black market operators solely by players because they wouldn't find the deposit opportunities they're looking for if that were to happen, if a player were to move down to €1,000, maybe from €10,000, maybe from €30,000, possibly with many operators. Only outside of the German licensed market would they be able to locate them.

The Gaming in Germany webinar also covered the possibility of sweepstakes being allowed, esports betting regulations, and if a recent Halle Administrative Court decision fundamentally jeopardizes the current implementation of the GlüStv 2021.