A leading European gambling operator has issued new warnings about the risks to the German betting market caused by new regulatory restrictions.

Martin Lycka, the Director of regulatory affairs at GVC Holdings, has warned that the rules could lead to an increase in use of the black market by German customers.

The warning is the latest in a series of concerns expressed by operators in the German market in recent weeks. Last month, the European Gaming and Betting Association urged policymakers in Germany to consider a simplification of the country’s complicated framework.

The backdrop to these concerns is the launch of a new regulatory framework for the gambling industry in Germany, which will come into effect from next July. These rules will allow for the registration of an unlimited+ number of sports betting operators, online poker games and virtual slot machines, along with a limited number of online casinos.

But writing in a European journal, Lycka focused on areas of concern, including a ban on live streaming of sport on betting sites and the outlawing of advertising before 21:00. In addition, the rules also enforce a one-minute delay for customers on each occasion when they switch between different games using the same site; a €1 stake limit for all virtual slot machines and the limitation of in-play sports betting to the final score. Lycka said that the new rules had the potential to drive German gambling customers to illegal sites:

“Due to the many restrictions surrounding the new rules, licensed products will be much less attractive and less competitive than their unlicensed counterparts. There is, therefore, a huge risk that customers will move to the black market, where there is zero responsibility, zero protection and zero tax being paid.”

He went on to add that the risk was being exacerbated by some federal states, such as Lower Saxony, who have attempted to impede gambling firms and payment providers. He warned that there was likely to be considerable inconsistency between states, particularly when it came to casino table games, which lead to an uneven playing field. He also contrasted the regulations’ approach to table games with the more lenient rules on slots, online poker and sports betting. It seems unlikely, however, that there will be significant changes to the proposed rules, which make up the Fourth State Treaty on Gambling, which were arrived at after many months of negotiations.  

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