German State of Lower Saxony Issues First Federal Payment Blocking Order with More to Follow

Posted at: 24 June 2019

The German state of Lower Saxony (Niedersachsen) has issued an international payment service provider with a blocking order. The ban is a result of the Government’s ambitions to block online gambling operators licensed with other European jurisdictions from serving German players.

The provider in question is no longer allowed to do business with companies offering gambling-oriented products and services to German residents. The payment processor is unnamed, but it is likely to be prohibited from serving not only Lower Saxony residents but German players in general.

In addition, the payment service provider may be accused of violating the State Treaty laws by providing German citizens with the opportunity to deposit at unlicensed online casinos.

Boris Pistorius, the Minister for Home Affairs and Sports, said that online gambling is banned by the State Treaty and offshore operators must be prosecuted. At the same time, online gambling is an ever-evolving industry attracting a great number of players and generating billions of € in revenues.

The Ministry announced that apart from issuing a blocking order, it has also sent warnings to other payment providers. Some of them have already ceased their operations and no longer process payments to and from online casinos that do not hold the necessary permits to operate in Germany.

In response to the imposed ban, the European Gaming & Betting Association (EGBA) said that the payment blocking is not the most viable solution and proposed the development of a liberalised regulatory framework. That idea is not so far fetched given the fact that the restrictive State Treaty is slated to expire in June 2021 and the number of states willing to allow their citizens to gamble online is growing.

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