Crypto Gambling Laws in Germany: Full Guide
- Germany allows legal crypto betting with regulated operators.
- GlüStV 2021 legalizes online gambling, treating crypto as a payment method.
- Player protections include a €1,000 monthly deposit limit and age restrictions.
Crypto Gambling Laws in Germany
Germany has a comprehensive legal framework for both gambling and cryptocurrencies. Gambling is fully permitted in all 16 German states while crypto itself is legal and regulated in the country.
We will examine the intersection both in this article, offering a full guide and legal breakdown of the laws surrounding crypto betting in Germany.
Top Crypto Betting Sites for Players in Germany
Before we delve into all the details of German crypto gambling laws, it helps to know the global crypto betting sites that are available to German players, though not regulated in the country. Below is a list of some of the more prominent platforms:
Is Crypto Betting Legal in Germany?
Yes, crypto betting is legal in Germany as long as the operator is properly licensed and regulated. The German Interstate Treaty on Gambling, enacted in 2021, legalized and regulates online gambling, including the use of cryptocurrencies, across all 16 states.
Online Gambling Laws in Germany
Online gambling in Germany was originally restricted, with Schleswig-Holstein being the only state to have a more liberal licensing policy. However, the Interstate Treaty on Gambling (GlüStV 2021) marked a significant turning point as it finally legalized various forms of online gambling across all 16 German states and established a unified regulatory framework.
By providing a clear legal framework, the treaty hopes to channel gambling into regulated offerings and combat the black market. It also aims to protect players from gambling addiction and excessive losses.
The GlüStV 2021 allows for licenses for:
- Online sports betting
- Virtual slot machines
- Online poker
- Online casino games (roulette, blackjack, baccarat)
Full Guide to Crypto Betting Laws in Germany
Cryptocurrencies are legal in Germany and recognized as "financial instruments" by the Federal Financial Supervisory Authority (BaFin). However, they are NOT considered legal tender but regarded as "digital assets.
The GlüStV 2021 does not distinguish between fiat and cryptocurrency for gambling purposes. All that is required for an online betting platform is to hold a valid license for the specific type of game being offered and they can carry on with their gambling services.
If a German-licensed online casino or sports betting platform accepts cryptocurrencies as a means of transaction, then using crypto on that platform is legal for players.
It is important to note that while the broader crypto and gambling frameworks exist, a specific set of regulations directly addressing "crypto gambling" as a distinct activity does not exist. Instead, it falls under the overall online gambling regulations, with cryptocurrencies treated as a payment method.
This simply means the legality of crypto betting hinges on the platform's gambling license, not on the use of cryptocurrency.
Player Restrictions on Crypto Betting in Germany
In a bid to protect players from gambling addiction and excessive losses, the GlüStV 2021 has restrictions in place, which also applies to crypto betting. Strict measures are in place to prevent underage gambling, with the legal age set at 18.
A strict €1,000 monthly deposit limit is placed across all licensed operators while live casino games and progressive jackpot slots are generally not permitted under the current licensing framework. Live betting on sports is also highly restricted.
AML/KYC for Crypto Betting in Germany
The AML (Anti-Money Laundering) and KYC (Know Your Customer) regulations for crypto betting are a direct extension of Germany’s policy for both online gambling and cryptocurrency. There are no separate, specific AML/KYC rules for crypto betting as the existing regulations apply, with particular attention to the unique characteristics of cryptocurrency.
All online gambling operators licensed in Germany, regardless of whether they accept fiat or crypto, are mandated to adhere to the following core AML/KYC principles:
- Operators must assess their individual money laundering and terrorist financing risks, considering factors like customer types, services offered, geographical areas, and payment methods (including crypto).
- Operators must verify the identity of the players. This includes, collection of names, addresses, identification documents, age verification, etc.
- Operators are mandated to report any suspicious transactions or activities that might indicate money laundering or terrorist financing to the Financial Intelligence Unit (FIU).
- Operators must implement internal controls, policies, procedures, and training programs for employees to ensure AML/KYC compliance. This includes appointing a dedicated Money Laundering Reporting Officer.
German Tax Laws on Crypto Betting Winnings
Germany has generally favorable tax regulations for casual gambling winnings, including those derived from crypto betting, provided the activity is conducted with a licensed operator. However, the taxation of the underlying cryptocurrency itself has some complexities.
While the winnings from a wager might be tax-free for a casual gambler, winnings from crypto bets are subject to German crypto tax laws regarding the value appreciation of the cryptocurrency itself.
Crypto gains (including betting winnings) in Germany are generally subject to income tax, not capital gains tax. A significant advantage for cryptocurrency holders is the "hodl" incentive, which offers a tax exemption on profits if you hold cryptocurrency for more than one year before selling it.
To illustrate, when you earn crypto winnings from a bet, that winning itself is typically tax-free. However, the crypto you received now has an "acquisition cost" for tax purposes equal to its Euro market value at the exact time you won it.
If you hold the won crypto for more than one year from the moment you won it, and its value increases, that appreciation will be tax-free when you eventually sell or spend it. However, if it is within one year of winning it, and its value has increased since the moment you won it, that profit would be subject to income tax.
Future of Crypto Betting Regulations in Germany
Although the GlüStV 2021 aimed for uniformity, there are still some challenges with its implementation and enforcement European Court of Justice decisions expected in late 2025 or 2026 could further influence the interpretation and application of German gambling laws.
Given the ever-evolving nature of the crypto landscape, there's a possibility of further regulations directly addressing crypto-related gambling activities. The ongoing evaluation of the GlüStV will also determine future adjustments.
Crypto Gambling Laws in Germany FAQs
- Is crypto betting legal in Germany?
Yes, crypto betting is legal in Germany as long as the operator is properly licensed and regulated. The German Interstate Treaty on Gambling, enacted in 2021, legalized and regulates online gambling, including the use of cryptocurrencies, across all 16 states.
- Is crypto Betting specifically regulated in Germany?
No, there is no separate, dedicated legal framework just for crypto betting in Germany. The legality of crypto betting in Germany depends entirely on whether the platform holds a valid license under the GlüStV 2021.
- Are crypto winnings taxed in Germany?
Betting winnings (including cryptocurrency) are typically tax-free under German regulations. However if you acquire cryptocurrency , use it to place a bet and sell winnings for fiat within one year of purchase, any profit from its appreciation is subject to your individual income tax rate.
- Are there specific risks associated with crypto betting in Germany?
There are no specific risks associated with crypto betting besides the general dangers with gambling as a whole. However, there are risks associated with cryptocurrency volatility and the danger of engaging with unregulated platforms.
- Are there player restrictions on crypto betting in Germany?
In a bid to protect players from gambling addiction and excessive losses, the GlüStV 2021 has restrictions in place, which also applies to crypto betting. Strict measures are in place to prevent underage gambling, with the legal age set at 18 while a €1,000 monthly deposit limit is also placed across all licensed operators.
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