North Rhine-Westphalia to Privatize Casinos

The German state of North Rhine-Westphalia has passed new legislation that will allow it to privatize its land-based casinos. What follows will be a bidding process, in which interested parties can submit their proposal for consideration. The winning bidder could be granted the lucrative opportunity to run all of the state’s casinos for the next 15 years, as well as securing a foothold on the online market to be legalized next year.

Looking up at the Brandenburg Gate in Berlin.

Lawmakers recently met in Berlin to pass legislation for online casinos in Germany, which is due to come into place in July 2021. ©Håkon Sataøen/Unsplash

Opportunity to Run NRW’s Casinos for 15 Years

German state North Rhine-Westphalia has now passed a bill that will lead to the privatization of its land-based casinos. The new bill will allow a tender process to begin, in which an operator will be chosen for the state. That operator will then be granted the opportunity to run up to six venues in North Rhine-Westphalia, or, as it is known in German, Nordrhein-Westfalen.

The state of North Rhine-Westphalia lies on the western border of Germany, and contains a large number of well-known cities. Düsseldorf, Cologne and Bonn all attract business and tourists from around the world. Out of all 16 German states, North Rhine-Westphalia has the largest population. These factors combine to make the state a popular destination for casino-goers.

Legislation was passed last week in state parliament. Despite opposition from other parties, votes from the Free Democratic Party and Christian Democratic Union were enough to push the legislation through, paving the way for the state’s casinos to be privatized.

It has been a fairly lengthy process for the state to get to this point. It was in May 2018 when the government first announced that it would privatize operator Westdeutsche Spielbanken. Shares in the operator owned by NRW.Bank, which is itself state-owned, were sold off. Now the state owns WestSpiel. The state’s Casino law has also had to be amended to allow casinos to be owned privately.

At the moment, WestSpiel runs four casinos in North Rhine-Westphalia. These are in Aachen, Bad Oeynhausen and Dortmund. It also runs Casino Duisberg through a subsidiary and runs another two casinos in Bremen. A new private operator could in theory build another two casinos, on top running the four existing WestSpiel casinos.

Interested parties will be able to put in bids to become the state’s private operator. It has been rumored that Gauselmann Group will put in a bid, although this has not yet been confirmed or denied. However, the gambling giant Gauselmann could be a hotly tipped favorite, as it does already have its headquarters based in the state.

Bidders will need to already be based in Europe and will have submit plans detailing how they would run venues while safeguarding players. North Rhine-Westphalia’s Ministry of the Interior will oversee the winning bid. It could be a close competition though, as whichever company as picked will be awarded a monopoly on the state’s casinos for the next 15 years.

Has the Bill Been Rushed Through?

The fact that this bill has now passed will not please all parties though. Members of the Social Democratic Party, Bündnis 90/Green and Alternative für Deutschland staunchly opposed it. The first two parties were particularly concerned over what they saw as the bill being rushed through. They questioned the necessity of the bill, as WestSpiel casinos had been doing well before the coronavirus pandemic hit.

Both parties highlighted concerns over where taxes would go once the operator is privatized. Player protections also need further consideration according to Bündnis 90/Green. If the state’s casinos come into private ownership, the state will have less control over enforcing responsible gambling.

New gambling regulations are to be introduced in Germany in July 2021. Critics argue that North Rhine-Westphalia has jumped the gun in passing this legislation, and should have waited one more year. However, whoever is awarded the operations of the state’s casinos could be in an enviable position when online casinos are officially legalized.

Lawmakers in Berlin approved the new gambling regulations set to come into place in July 2021 in March. They also agreed on establishing the new regulatory authority in Sachen-Anhalt. This outcome came as a surprise to many, as Hesse, which regulates sports betting licenses, or even North Rhine-Westphalia seemed more probable choices.

The legislation, which is called the “Glücksspielneuregulierungstaatsvertrag”, or simply GlüNeuRStv for short, will broaden the scope of online gambling opportunities in Germany. The legislation has since been submitted to the European Commission, a necessary step in the road to bringing the new laws into practice. So far 13 of Germany’s 16 states have agreed to the terms set out in the new treaty.

In other news, Visa has announced that will discontinue payments for online gambling sites in Germany. As Germany’s online casinos are still unregulated, Visa has decided that it will no longer accept payments from them. The decision comes as a knock-on effect of the new gambling treaty to be introduced next year, which states that online gambling services in Germany are currently illegal until the treaty comes into place.

German players have also expressed difficulty in using MasterCard to withdraw and make deposits at online gambling sites. It has been reported that 19 payment services have been in discussions about withdrawing their services from Germany’s illegal operators. It is thought that from these talks, nine have agreed to do so.

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