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Verification and Authentication a key focus for new German GlüNeuRStV regulations

Wednesday, 4 November 2020

Regulation Changes The progress of legalising online gaming across Germany has been patchy, but there was a breakthrough on 12 March 2020 when the latest Glücksspielneuregulierungstaatsvertrag (GlüNeuRStV) was approved by the German heads of state. It acts as a compromise between states wanting the market to be open and those wanting gambling to be more restricted. This treaty will open up the online market to all products and verticals, specifically poker and virtual slots, with the legislation set to come into force on 1 July 2021. It will therefore significantly liberalise the market, subject to strict conditions concerning player protection. Note that online sports betting is already permitted and is largely unaffected by these developments as the legal basis for sports betting falls under the current treaty, which is known as IST2012/2020 (or the Third Amending Interstate Treaty) which came into effect on 1 January 2020. The supervision of GlüNeuRStV will be coordinated by the 16 German Länder, with the Hessian Regional Council of Darmstadt currently responsible for overseeing licensed online sports betting providers. A central authority will be created in Saxony-Anhalt to monitor all aspects of online gaming, but this is expected to take until the end of 2022 to set up. Ahead of July 2021, a transition period was agreed to enable all existing operators and the German Länder to adapt to the new legal framework. This period began on 15 October 2020 and will be used to clarify existing and forthcoming mandates, including those on age verification. However, it’s important to note the industry must comply with the new laws as of 15 October (with a few exceptions deferred to 15 December). Verification & Authentication Age verification has been a hot topic in Germany since an investigation by the Bavarian Consumer Centre highlighted the ease at which under-18s could access five major online gambling sites. The research was conducted in the autumn of 2019 and demonstrated that “minors can easily register with the wrong date of birth” and thereby “get unhindered access to sports betting and gambling on the internet.” To get a license in Germany under the new regime, online gambling operators will need to demonstrate a robust age verification solution. Certain legal provisions apply. The legal provision on the protection of minors in IST2012/2020 is strongly influenced by Section 6 of the 2002 Jugendschutzgesetz (JuSchG), which focuses on restricting under-18s to a range of services including alcohol and tobacco as well as gambling. GlüNeuRStV does not change these obligations. The law on preventing under-18s from accessing gambling and gambling-related services specifically relates to § 4 paragraph 3 and paragraph 5 part 1 of the treaty. This states that it is illegal to offer gambling services to under-18s and that the exclusion of minors must be done through identification and authentication procedures conducted by the operator. This relates to preliminary and full ID checks. Age verification in Germany forms a key part of KYC checks, with players already subject to an extensive verification process based on regulatory and anti-money laundering (AML) requirements at the point of registration. IST2012/2020 states that the following information is required during the registration process: First Name, Surname, Address, Date and Place of Birth (city and country) and Nationality. From 1 July 2021, customers will also need to submit their maiden name where appropriate. Solutions for the German iGaming market AgeChecked is one of the companies offering German gaming operators and affiliates a compliant secure verification and authentication service. Their service can swiftly and accurately confirm that the player is over the age of 18, ensuring a smooth onboarding process to verify. For the full onboarding journey, they offer full KYC and bank checks to confirm the details of the players and authenticate individuals by confirming their access to a personal bank account. A further monitoring service can assure that the player is adhering to the new regulations of only being able to use one bank account per operator. The risks of failure to demonstrate a system of age and identity verification, are significant. It will likely result in a licence application being rejected. For current operators in the German market, it could lead to the revocation of their license and fines of up to €500,000. So, with commercial impact and significant reputational damage associated with underage gambling, it makes sense for operators to make age verification and player authentication the highest priority.

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