Q&A: Renatus Zilles, CEO of DVTM, on Germany's regulatory future
With the ECJ set to rule on the legality of the German regime, one of its harshest critics discusses the prospects for re-regulation
The German Association for Telecommunications and Media (DVTM), which counts several operators including PokerStars, Tipico and bet-at-home among its members, has been among the most vocal critics of Germany’s troubled regulatory framework.
Earlier this month the DVTM issued a statement calling for the development of a reliable legal framework and more permissive licensing, as the European Commission prepares to rule on the legality of Germany’s regulatory regime next month.
eGaming Review caught up with Renatus Zilles, CEO of DVTM, to discuss the current state of Germany’s framework and whether we might finally see a change for the better.
eGaming Review(eGR): What are the main criticisms of regulation you hear from your members?
Renatus Zilles (RZ): Overall, online sports betting operators are rather frustrated about the sports betting licensing procedure in Germany. They want the limitation to 20 licenses to be lifted. Online poker and casino operators licensed in many European member states find it difficult to understand that a big member state like Germany neither regulates its market nor implements a reasonable licensing and tax system.
Models such as in Denmark show that online gambling can be effectively controlled and that a real channelisation towards regulated offers is possible. A taxation of 20% on net gaming revenue is a key steering tool to achieve such a positive result. Members of the online gambling industry regret that so few politicians are actively supporting effective regulation.
eGR: How will things progress should the ECJ return a non-compliant ruling in September?
RZ: The sports betting licensing procedure continues to stagnate, due to the current German case law. A negative statement from the ECJ in the “Ince” [C-336/14] case would mean a final blow to the [current] sports betting regulation.
Another important development is the initiation of the recent ‘pilot proceeding’ of the European Commission concerning the German Interstate Treaty on Gambling (ITG). A pilot proceeding is the preliminary stage of a possible infringement proceeding against an EU member state. In its letter the EC raised multiple issues regarding the failure of the ITG regulation and its unsuccessful enforcement, especially in the online sector. The EC criticises the prohibition of online casino and poker games and the lack of a justification for the prohibition, as well as the unsuccessful sports betting license procedure and the limitation to 20 sports betting licenses.
In our view, the judgment of the ECJ, as well as the actions of the EC, are increasing the pressure on Germany to implement a completely new regulatory framework in the gambling sector.
eGR: Is there political will in Germany to re-start the regulatory process?
RZ: Yes, at least partly, and the political will is currently growing. The Minister of the Interior of the federal state of Hesse, Peter Beuth, called for a re-regulation of the sports betting license procedure and of the complete ITG. The Hesse Ministry of the Interior is responsible for the (failed) submission of the sports betting licenses for Germany.
Those behind the former liberal and EU-compliant Gambling Act of Schleswig-Holstein, Hans-Jörn Arp and Wolfgang Kubicki, have also urged the state ministers to support Mr. Beuth and to find a new, EU-compliant gambling regime for Germany based on the former Schleswig-Holstein model.
The DVTM supports the key message from Hesse and its minister Beuth, which is that the quantity regulation basis should be exchanged for a clear quality approach. Fit and proper tests of the operators and strict conditions to prove the quality of the license holders should be implemented.
eGR: How would you like to see the German market regulated?
RZ: We call for the implementation of a single gambling licensing and supervisory authority, responsible for the whole of Germany and established under public law.
We also strongly recommend the regulation and licensing of the whole gambling sector. This means a contemporary regulatory licensing system for online sports betting, but also for online poker, casino games and the private lottery sector. In our view, this is essential to protect consumers, to fight the black market and to generate a state income from taxes.
The regulation that had been chosen in states like Denmark and the Netherlands was also the basis for the Schleswig-Holstein regulation.