Germany is a country in central Europe and borders close to nine other European countries. It is a federal republic nation with over 80 million residents living in the country. Germany has had many significant and successful artists, philosophers, musicians, scientists, entrepreneurs and inventors throughout history. Over time, Germany has also become a center for education for international students, offers diverse professional opportunities and is a popular tourist destination.
The history of lottery in Germany
The German lottery is one of the oldest legally run European lotteries. The first lotteries made their appearance in Southern Germany in the latter half of the 15th century. It was recorded in Augsburg in 1470. Soon after, other lotteries followed in Strasburg in 1473, Erfurt in 1477, Gmunden in 1480 and many other lotteries in Nurnberg in 1487. The lotteries moved to the northern states around the beginning of the 16th century. The first northern state lottery was held in the year 1506 in Frankfurt on Main. This was followed by a lottery in Osnabruck in 1521, and multiple lotteries in Rostock around the same year. The earlier lotteries did not give out money as prizes. On the contrary, they gave out merchandise as the prizes. This went on until a monetary law was declared in Hamburg around the year 1610. Thus this year, the very first legally authorized lottery was held in Hamburg. The lotteries expanded to other cities and saw a lot of success. It is said that this was the official Dutch origin of the lotteries since the Hamburg Senate explicitly mentioned that the lotteries were held as a way of raising revenue in Holland. The next city to hold the lotteries was Friedrichstadt. Another hint that points towards the journey of lotteries here being the beginning of the Dutch lotteries was that the city of Hamburg was at the time a Dutch settlement.
In the year 1907, a class lottery was established in Berlin. However, it took fifty years for those in power to fully understand the benefit of the lotteries. After nearly half a century, in the year 1763, the lotteries were nationalized. At the same time, the Prussian king, Friedrich the second banned any out of the state and private run lotteries. Class lotteries gained popularity and were set up everywhere in Germany. Munich established its lottery in 1785 and similar to the decision passed by Friedrich the second, banned foreign lotteries. Soon after this, all the other states and cities followed and established their own class lotteries. But the class lotteries were not as successful as the lotto which was first introduced in Berlin in the year 1763. After it was introduced, the lotto quickly spread throughout Germany. In about a decade, over 20 cities in Germany has established lotto as the latest form of gambling. A lotto magazine named ‘Lottologie’ was introduced and published in Hamburg. But unlike the class lotteries, the lotto faced a lot more harsh criticisms. Unable to keep up with the heat and pressure of the controversy, Hamburg shut down its lotto in the year 1785. The last state that abandoned the lotto was Bavaria in the year 1861. After the German unification (in the year 1871), the smaller states took to promoting their own traditional class lotteries ignoring the Prussian Lottery. As per the treaties signed by Prussia, the states were not allowed to sell their lottery tickets in other states and the states that had not yet set up any lotteries agreed to never set up on. Whereas Prussia was allowed to sell its lottery anywhere and everywhere. To be able to do this, it made certain payments to the other states that were involved in the lotteries.
The first countries to resist the Prussian pressure were Saxony, Hamburg, and Brunswick. Various lotteries coexisted until the year 1938. This was when all of them were merged into a single massive lottery under the act of the Nazi Gleichschaltung. This lottery ran for a few years successfully until the year 1945 when its operation was interrupted.
In the year 1947, four class lotteries came back into an establishment. These were the Suddeutsche Klassenlotterie in Munich, the Norddeutsche Klassenlotterie in Hamburg, the Klassenlotterie des Landes Rheinland-Pfalz in Koblenz,(This was later on integrated with the Munich lottery) and the Deutsche Klassenlotterie in Berlin. The last lottery, the Deutschetr Klassenlotterie was later on integrated with the Hamburg lottery after the construction of the Berlin wall.
Along with this, a new system of lotto was authorized in Berlin in the year 1952 and eventually in the rest of Western Germany in the year 1955. This latest authorized lotto was based on the 6 out of 49 system that we see today as opposed to the original traditional system of 5 out of 90. Drawings were held every Saturday for this and the sales of lottery tickets did not change by a lot. Despite this, the lotto took over the market and soon became one of the most demanded and trendy gambling games of the time. In the year 1982, two more weekly drawings were announced. This was based on a 7 out of 38 system. Soon, the success of the lotto spread from Germany to other countries in the world.
The legal Journey of the Garman Lotteries
Most of the countries in Europe that run lotteries have a long history of the journey of their lottery. Germany is no different. Gambling and lotteries have been conducted legally in the country for a very long time. The local state authorities and the responsible jurisdictions oversee the lotteries today. Although for the longest time, states held complete control and authority over the lotteries in their jurisdiction, this changed in 2008 when the Gaming legislation was enforced. A new state treaty on the gaming act was codified and sixteen federal states gave up some of their authority and jurisdiction on lotteries to the national government. This treaty was challenged and met with a lot of criticism from the people because it banned all forms of internet gambling. A major reason for this criticism was that this would push those interested in lotteries to visit the websites of other foreign lotteries and this would have a negative impact on the revenue that could be leveraged from the lotteries. This treaty also has the national government complete monopoly over the lottery system in the country. The German federal parliament also refused any privatization of lotteries. And then in 2011, the Federal Administrative Court, of Leipzig declared a de-facto ban on all advertising by state-controlled or private lottery and casino operators. It became clear that there would be no privatization of lotteries happening.
The North Western German class lottery (known popularly as the NKL), has not changed since 1947 despite the change in the lottery laws. This lottery was established in 1612 and came under the conglomeration of ten states in the year 1947. It has been successful in surviving by negotiating through complicated situations. In the year 2012, Germany agreed to the European Union’s suggested change to the gambling and gaming act and alter few aspects of the state treaty. This change was with regard to the monopoly the national government held. The new state treaty allowed parts of the gambling monopoly to be partially broken up. Thanks to this change, the North Western German class lottery (NKL) and the South German class lottery (SKL) which is a six-state institution, joined together to form the Gemeinsame Klassenlotterie (GKL).
The German Lotteries follows a traditional structure – it has a 6/49 arrangement and a guaranteed 1 million Euro jackpot. The average jackpot prize stands at 5.24 million Euros. This massive amount is an invitation for players to come back and play the German lotteries every week. Another thing to note about the German lotteries is that it does not have a fixed location where the numbers are drawn. The drawing system is cyclic and jumps through the cities of Bayern, Berlin, Baden-Württemberg, Brandenburg, Hamburg, Hessen, Bremen, Niedersachsen, Nordrhein-Westfalen, Mecklenburg-Vorpommern, Rheinland-Pflaz, Saarland, Sachsen-Anhalt, Sachsen, Thüringen, and Schleswig-Holstein. The lottery coming to the city is celebrated in a grand manner and there are people who travel along with the lottery to these cities. It is said that they believe that being closer to the draw would increase their chance of winning.
The current lotteries “Lott 6 aus 49” came in origin nearly sixty years ago. In 1975, this lottery joined together with the ‘Deutscher Lotto-und Totoblock’ (DLTB) and since then have been conducting lotteries together. It has gained an immense reputation with the people and gives away 5 billion euros in prizes annually. The first draw of the German lotteries happened in Frankfurt. It is said that since then this has changed. The residents of Saarbrucken see more luck in terms of lotteries today. The draw for the German lotteries could be watched live on the television broadcast for a long time. This changed when the viewership for this suddenly stopped and disappeared. Only big wins are broadcasted on television now. Today, the German lotteries can be followed live on the German National Lotto website. The popularity of the German Lotto is evidently seen when the draw happens every Wednesday and Saturday, at 18.25 pm.
The Governing policies
As per the German federal system, gambling law is regulated at the state level. This means that each of the 16 states has respective laws for lotteries that fall in their jurisdiction. To ensure that there is uniformity among these laws, the states have agreed on certain common principles and regulations for certain fields of gambling that also align with the interstate treaty. As of January 1st, 2018, an amendment has been added to the state treaty. According to this amendment, the responsibility of the sports betting sector has been taken over by North Rhine-Westphalia. Similarly, other states have been assigned specific types of lotteries to run. The Free Hanseatic city of Hamburg regulated the “class lotteries” and the state of Rhineland Palatine regulates other national lotteries operated across the German states.
The German states have always held strong opinions about gambling and the government wanted to retain it as a monopoly. From January 2012 until February 2013, the state of Schleswig-Holstein has its own gambling policy that allowed licenses to be issued to online casinos and sports betting operators. At this time, the 15 other states were already part of the interstate treaty. Eventually, the state joined its counterparts after a change in the government.
The Gambling regulation in Germany, states a product should qualify as a ‘game of chance’ to be considered under the scope of the Interstate Treaty on Gambling (simply known as the Interstate Treaty). The entire legal framework of gambling and lottery laws is based on this concept. This consideration applied whenever any considerable prize (in cash or in kind) is given in exchange for a chance to win and the determination of winning is completely or predominantly dependent on chance. All of this has to be bound into the context of a game. And in such cases, these games of chances would be referred to as ‘gambling’. Placing bets are also accepted by the Interstate Treaty as games of chance. Private operators who offer to bet for fixed-odds sports games have to follow a licensing system in order to do this legally. Placing bets on horse races is also allowed.
Betting on anything else other than sports is prohibited as per the treaty. Referred to as social betting, this applies to offers for placing bets on political events, financial products, and any trading related event. It is banned as per the German Gambling laws and may be subject to financial services and banking regulations also and not just the Gambling regulations. State monopoly offers pool betting and is classified as one of the types of lotteries. Games do not fall under the interstate treaty’s definition of gambling or lottery since it is not a game of chance. And therefore, games are not subject to the gambling regulations. Nevertheless, it may be subject to other regulations that have been established with an aim to protect consumers. As per the treaty games as divided into different types. There are either skill games that do not have an element of chance or there are free-to-play games where there is no payment made in order to participate in the game. This categorization may be a case to case analysis and we cannot state a fixed set of principles that differentiate these two. All of the social games are said to be mostly classified as games of skill.
The treaty also explains that ‘in the absence of specific regulations, the legal classification of fantasy league games offered to German players will depend on specifics of the product including the overall design and structure, and whether the game would classify as a game of chance as per definition is given by the treaty. Thus, because of all of this, skill-based competitions and competitive sports do not fall within the scope of the Gambling regulation and the interstate treaty in Germany.
Details of the Gambling policy
Prevention of Gambling addiction and protection of minors and vulnerable people is a top priority for the German Gambling Policy. Therefore, the channeling of players towards a regulated market and a guarantee of an “orderly and fair” gambling offering, and tacking issues related to fraud and other gambling crimes were key supportive points that were given importance to and included in the policy. It was also crucial to protect and maintain the integrity of sports. This was declared as one of the goals of the German gambling regulation.
Although there is a strong and clear position that the country of Germany takes with regard to Gambling, there is no clear position that has been taken by the nation with regard to online and casino gambling. It is neither prohibited nor encouraged in the German gambling laws. However, the German gambling regulations are constantly changing and getting updated. This is because there is a continuous clash between the German states that treasure their monopoly over their lotteries and the European Union laws who that continue to criticize the treaty. And any change in the treaty today is most often as a result of a decision from the Court of Justice of the European Union (CJEU) or the national courts or the intervention on the part of the European Commission that request change in laws because the fundamental freedoms are not sufficiently ensured. The European Commission has also often stated that as per the treaty and the existing regulation and licensing rules, it will be difficult for regulatory goals to be achieved. The German states are currently in the process of implementing another new reform that can help better the regulation process and bring in reforms in the German lotteries that fall in place with the EU Gambling laws.
There are also some major changes that are expected to come with regard to the gaming halls and the statutory number of licenses that can be offered to gaming halls. There is, however, rules with regard to the strict minimum distance between gaming halls and vulnerable institutions such as schools and/or addiction centers. There are also strict laws that state that gaming halls cannot be in the same building as casinos betting shops. This helps limit the number of gaming halls that can be established to practice.
Online and remote gambling and purchase of lotteries have different regulations as compared to land-based casinos or betting shops. The interstate treaty has imposed a general ban on online gambling. According to the law, the only exceptions to this ban apply for licensed traditional lotteries, horse racing, and sports betting. The interstate treaty does not offer any licensing systems for online casinos and betting websites. This lack of licensing systems for online casinos is criticized by both experts from the industry and the European Commission. In 2017, during a pilot process, the European Union stated clearly that it considered this ban ineffective in achieving the goals that have been set out by the Interstate Treaty. Only one state in Germany has in the past offered licenses that could be issued for online casinos. But these licenses were valid only for a limited period of time and were also limited in terms of scope of the territory (allowed only in Schleswig Holstein). The issued licenses were expected to have expired in 2018. But there have been no updates on this and the exact date and month of expiration cannot be found anywhere.
Purchasing lottery tickets online
Age for purchasing lottery tickets
All players of the lotteries purchasing tickets online and on-site must be 18 years of age or older.
Who can participate in the German Lotteries?
The only restriction that the German lotteries are for players to meet the age limit in order to be able to play the lottery games. Other than this, any person can play the German lotteries online. It is not restricted to German citizens and residents alone. It is also not required for the player to be in Germany while playing the game. This is something that is quite unique about the German lotteries. Most other countries have player restrictions in terms of citizenship or residential status. There have also been recorded cases where players from other countries have won prizes and the jackpot by playing the German lotteries. However, players must keep in mind two important things. 1. Even if a player from another country wins the German lotteries, it may be required for them to travel to Germany to collect this amount. Especially if the winner has to collect a jackpot. The small amount may be transferred to website account. 2. The players must ensure that they are using a valid and authorized website for purchasing tickets. The German laws may not be able to protect a foreign consumer under its laws. It is the responsibility of the players to ensure that the website is not an invalid one.
Paying for lottery tickets in Germany: For players who are purchasing tickets on-site with authorized operators or sellers can pay buy tickets with cash directly. Card payments are also allowed. Online websites make it easier for players to participate in the different games and purchase tickets online. Online payments can be done with any Visa or MasterCard. Although purchasing lottery tickets online using e-wallets is getting more popular, it is not mentioned anywhere that this is an accepted legal means of payment. Therefore, it is advised that buyers do not use e-wallets unless they are sure the payment would be legally valid. Similarly, it is also advised that buyers do not use credit cards for the purchase of lottery tickets. It is an unnecessary risk and could lead to dire consequences such as financial loss and/or gambling addiction.
Creating an online account: Participating in any of the online lottery games requires the players to register for an online account. Here, the buyer can choose to be an individual player or choose to purchase tickets as a group or a syndicate. An important advantage of an online account is that players will be able to opt for subscriptions. This essentially means that the players will not have to manually purchase tickets every time. They can pre-select their numbers and the tickets will be bought and checked by the websites. If the buyer has won, the website sends notifications to the winner’s registered ID. Another crucial reason for registering for the online website is that it makes the transfer of any prize claims easy. All the winning prizes are transferred into the winner’s registered account.
Many online lottery websites have a self-test to check if the buyer is dealing with a gambling issue. If it is revealed that the buyer has a gambling addiction or is beginning to show symptoms of an addiction, they should step away from purchasing tickets and participating in lottery games for a while. During this time, online websites allow buyers and subscribers to put their account on hold for a temporary period. If the account is put on hold, it can be renewed at any time.
The prize claim process for German lotteries is very simple. If claiming from an authorized operator offline, the winner will have to provide their state verified identity cards along with the winning tickets. Most of the German lotteries is played online. Here, the player will have to ensure that their registered account has been verified. Prizes cannot be claimed without doing this. Once the account has been verified, the player can purchase the tickets. The results will be sent to the player’s verified e-mail ID. If the player has won, they can simply claim the prize via their registered account. The money will be transferred directly. There are no other processes described in any of the websites, therefore if the winner if facing issues claiming or collecting the money, they can contact the customer service from the homepage of their website. Since all prize winnings are transferred directly to the website, winners have the option of remaining anonymous while claiming. If they wish to share the news of their win, they can contact relevant people from the websites/lottery company who will only share the information that the winner wants to be shared. Players should also check with respective websites for ticket expiration dates as these have not been clearly specified.
The prize winnings from the German lotteries (cash or kind) is not taxable. However, this is limited to German citizens only. And anyone playing from other countries might be bound by the lottery laws of their countries. Players should check with their respective country laws or consult an attorney to understand the tax implications. For example, if someone from German won the US Powerball, they will have to pay taxes to IRS despite the prize being non-taxable in Germany.
Influence of German lotteries
There have a lot of lotteries that have emerged since the 20th century. The first lottery in France was in 1933 and the first lottery in the US began around 1980. Today almost most of the countries have lotteries in the American continent, Asia, Europe, Australia, and Africa. Most of the lotteries are operated by the state via government or private organizations. The only exception for this was the Irish sweepstake that no longer remains an exception. In the year 1956, the Association International des Lotteries d’Etas was founded. This association put forward the idea of international lotteries that would be used by the states and the nations to generate funds and revenue for development. They focused on spending these funds to increase education, sports, culture and battle illiteracy. However, owing to competition this was later rejected and countries began setting up individual lotteries that have seen great success since their inception.