Baden-Württemberg approves online casino regulation, third German state to allow virtual table games

Lawmakers in Stuttgart have approved the regulation of certain online casino games, making Baden-Württemberg the third German state to legalize state-run virtual blackjack and roulette. The decision follows similar measures adopted by Bavaria and Schleswig-Holstein in 2024 and aligns with the German Interstate Treaty on Gambling, which came into effect in 2021.

The treaty allowed individual states to create their own regulatory frameworks for online table games, giving them the authority to decide how these offerings should be managed. Baden-Württemberg has now opted to permit and regulate virtual table games, citing concerns that without legalization, residents would continue using unlicensed offshore providers that lack player protections.

The approved legislative bill argues that failing to regulate online table games would leave consumers vulnerable to illegal gambling platforms that operate without oversight or player protection measures. The bill acknowledges that many residents of Baden-Württemberg already access these games through unlicensed operators, which not only poses risks to players but also deprives the state of potential tax revenue.

The legislation states that it can be assumed that otherwise, people living in Baden-Württemberg will continue to play with illegal providers who do not comply with the necessary measures to protect players. It also notes that it would be difficult to justify why similar games are permitted in other states but not in Baden-Württemberg, further emphasizing the need for uniform gambling policies across Germany.

The new regulation establishes a tiered tax system for online casino revenue. Monthly revenue up to €300,000 ($314,335.50) will be taxed at 15 percent. Revenue between €300,000 and €750,000 ($785,838.75) will be subject to a 20 percent tax, while revenue exceeding €750,000 will be taxed at 25 percent. This taxation model is expected to generate additional revenue for the state while ensuring that operators contribute to the regulation and oversight of the industry.

The German online gaming market is considered one of the most tightly regulated in the world, with several restrictions imposed on operators. Among the most notable rules are a €1 stake limit per spin on online slots, a five percent tax on player stakes, and a mandatory five-second delay between spins.

Players are also subject to a €1,000 monthly deposit limit across all operators, which can only be lifted if they undergo a financial background check. These regulations have drawn criticism from industry stakeholders, with some arguing that strict deposit limits push high-stakes players toward unregulated offshore casinos. Proponents, however, contend that these measures help prevent gambling addiction and financial harm.

Bavaria was the first state to introduce online casino regulation in April 2024, followed by Schleswig-Holstein in September. Both states operate state-controlled online casinos, managed by official lottery and gaming authorities. The Interstate Treaty on Gambling, which set the foundation for online gaming regulation in Germany, was initially introduced to curb black market activity by providing players with a safer, state-monitored alternative.