German State to Legalize Online Poker

Germany has been the largest holdout when it comes to online gambling in Europe, with only federal state-sponsored lotteries and sports betting officially being allowed in the country. However, that could be changing, as local state governments may look to legalize and regulate online poker and other forms of gambling.

Schleswig-Holstein this week became the first of the 16 states in Germany to pass laws to regulate online gambling, which many believe will lead to other states following suit.

Under current German law, the federal government has a monopoly on gambling, and a ban exists for Internet wagering. However, the treaty that sets these rules is due to expire at the end of 2011, after which the new Schleswig-Holstein law will come into effect.

The law would permit most online gambling activities, but some games would still be restricted. Sports betting and exchange betting would be allowed, as would poker. Some casino games are also allowed under the law, while baccarat, blackjack and roulette are specifically prohibited. There is no limit on the number of licenses that could be awarded to operators to run sites in the state, but operators will be required to pay a 20% tax on gross profits.

While Germany has not officially allowed online gambling to flourish in the country, most experts believe that it is one of the most lucrative markets for online casinos and poker rooms in Europe. An estimate 2.2 million Germans gamble online, primarily at sites from other European countries and offshore sites. Germany’s anti-online gambling laws have been seen as being in opposition to EU policy, though no formal steps have been taken to overturn the policy as of yet.