Categories
Criminal Defense Technology- & IT-Law

Criminal liability for gambling in Germany

Gambling has always fascinated people. However, while they are an exciting leisure activity for many, their legal framework in Germany harbors numerous risks – both for providers and participants. This article highlights the legal regulations that providers must observe and explains the potential criminal consequences for participants in illegal gambling.

1. legal framework of gambling in Germany

Gambling is strictly regulated in Germany. The legal basis can be found in the German Criminal Code (StGB), in particular in Sections 284 et seq. and in the Interstate Treaty on Gambling (GlüStV). These laws primarily serve to protect players, prevent gambling addiction, combat fraud and manipulation and curb illegal gambling offers.

a) Definition of gambling

A game of chance exists if the outcome of a game depends predominantly on chance and a stake is placed in order to have a chance of winning (Section 3 GlüStV). A distinction is made between games of chance, games of skill and betting. The decisive factor is the element of chance, which is predominant in a game of chance.

b) Competence of the German gambling authorities

The regulation and approval of games of chance is the responsibility of the respective federal states. Since the 2021 amendment to the Interstate Treaty on Gambling, the organization and brokering of certain games of chance on the internet is permitted, provided that an official permit has been obtained. Without this permit, however, offering and participating remains punishable by law.

c) State monopoly and controlled liberalization

The GlüStV pursues a canalization approach: on the one hand, the gambling offer is to be bundled and monitored by the state, while on the other, illegal offers are to be effectively combated. The state monopoly for lotteries and certain other games of chance remains in place, while sports betting and online casinos have been allowed to be operated by the private sector under certain conditions since 2021.


2. criminal liability for providers of games of chance

Section 284 of the German Criminal Code (StGB) provides for severe penalties for organizing or brokering illegal games of chance. This provision covers:

  • Organizing games of chance without official approval.
  • The provision of premises or infrastructure for unauthorized gambling.
  • The advertising of illegal gambling offers (Section 284 (4) StGB).

a) Requirements for criminal liability

A provider is liable to prosecution if it organizes games of chance in Germany without the required license. A licence from another EU member state is not sufficient, as games of chance are not covered by the freedom to provide services under EU law as long as there is no harmonization at European level.

b) Penalty range

Organizing illegal games of chance is punishable by a prison sentence of up to two years or a fine. If the provider acts commercially or as a member of a gang, the penalty can be increased to up to five years’ imprisonment (Section 284 (3) StGB).

c) Responsibility of foreign providers

Foreign providers can also be liable to prosecution under German law if their offers are specifically aimed at players in Germany. This is the case, for example, if the website is written in German or is specifically aimed at the German market.


3. criminal liability for participants in illegal games of chance

Not only providers, but also players can be liable to prosecution. According to Section 285 of the German Criminal Code (StGB), participation in illegal gambling is punishable by law.

a) Requirements for criminal liability

A participant is liable to prosecution if they knowingly take part in a game of chance that does not have an official license. Conditional intent is sufficient, i.e. the player must accept the possibility of a lack of authorization. The Federal Court of Justice has emphasized that participants cannot rely solely on bona fide statements made by providers. In case of doubt, they must inform themselves about the legality of the service.

Beware, your biggest enemy is your own bank: if winnings from online gambling appear in your own account, this will be reported by your bank – and criminal proceedings will be initiated. I have considerable experience in such proceedings and in the end there is hardly anything left … if you know how to defend yourself.

b) Penalty range

Participation in illegal gambling is punishable by a fine or a prison sentence of up to six months. The Federal Court of Justice has clarified in rulings that the penalties for commercially organized gambling can be more severe.

c) Recovery of losses

The possibility of reclaiming losses from illegal gambling is a highly controversial issue. According to Section 812 of the German Civil Code (BGB), a reclaim could be possible if the underlying contract is deemed null and void due to a breach of Section 134 BGB (prohibition of unlawful transactions). In practice, however, the enforcement of such claims is complex, as providers are often based abroad and hide behind complicated corporate structures.


4. tax aspects and regulatory problems

Court decisions such as the BFH ruling from January 4, 2023 (XI B 51/22) highlight that tax regulations for games of chance are often difficult to enforce. Virtual slot machines and terrestrial slot machines are treated differently for tax purposes. Nevertheless, the Federal Fiscal Court has emphasized that this does not constitute a violation of the principle of equality (Art. 3 GG), as they are different services.

The ruling also shows that providers must expect considerable tax obligations. Tax evasion, as dealt with in a ruling by the BGH on August 8, 2017, can lead not only to fines but also to prison sentences.

5. challenges and criticism

The current legal situation is often criticized. A key difficulty is that illegal gambling providers often operate in countries that make it difficult to enforce German criminal laws. In addition, the confusing regulations of gambling law mean that many players do not know whether an offer is legal or not.

Another problem is the fragmentation of licensing procedures between the federal states. Despite the State Treaty on Gambling, the regulations are often not uniform, which leads to uncertainty among providers and players.

Conclusion

The participation in and offering of games of chance are strictly regulated in Germany. Providers must be aware of the high requirements for licensing procedures and risk severe penalties if they violate them. Players should carefully check whether a gambling offer is legal in order to avoid criminal prosecution. The legal situation remains unclear in many respects, which signals a need for reform. What is clear, however, is that German law relies on strict consumer protection and clear channeling of the gambling market.

German Lawyer Jens Ferner (Criminal Defense & IT-Law)
Latest posts by German Lawyer Jens Ferner (Criminal Defense & IT-Law) (see all)