European Gaming Lawyer magazine Autumn 2017 | Page 23

G
Joerg Hofmann
Matthias Spitz
Jessica Maier
ermany has become notorious for its
dysfunctional regulation of igaming
under the Interstate Treaty on
Gambling, the overarching
regulatory framework which broadly
bans online gambling with the exception of state
lottery products and a restrictive licensing regime for
sports betting. Regulatory enforcement of compliance
with AML and data protection laws may be seen as
the dark clouds ahead for the igaming industry in
2018. Recent announcements of Germany’s
northernmost state Schleswig-Holstein to (again)
push for a broader reform of gambling regulation,
however, suggest that there is also a silver lining on
the regulatory horizon.
Th is article takes a look into the regulatory “crystal
ball” to foresee the three key regulatory challenges the
igaming industry will be facing next year…
AML – a “big stick” for regulators?
Th e deadline for implementing the EU’s 4th Anti-
Money-Laundering Directive (the ‘4AMLD’) has
already expired on 26 June 2017, and the federal Anti-
Money-Laundering Act (the ‘AML Act’) came into
force on that same day. 1 Whilst the AML Act excludes
signifi cant parts of land-based gambling, including
retail lotteries and slot machine gambling in arcade
halls, sports betting and online gambling in general
are subject to the scope of the law.
Th e new key requirements also aff ect gambling
operations, including the obligation to implement a
risk management that is based on a comprehensive
risk analysis of the business of vulnerabilities to
money laundering and fi nancing of terrorism,
internal safeguards such as appointment of an
AML offi cer, vetting and training of staff as well as
thorough requirements to KYC and restrictions to
payments. 2 Th e latter might cause compliance teams
across the igaming industry quite a headache in that
any anonymous means of payments, such as cash
vouchers, are banned and the amount of credit card
transactions will be limited – unless the gambling
operator can match the card owner with the owner of
the customer account (sec. 16(4) AML Act.
Some igaming operators might be tempted to
argue that they are only subject to the regulations
of their country of residence, even if services are
provided to customers in Germany and payment
tran