The beginning of July 2017 will not be welcomed by the German gaming machine sector. 1 July 2017 marks the end of a transition period and the introduction of elements of the State Treaty on Gambling that could see half of Germany’s gaming arcades forced to close.

The first provision relates to the minimum distance between arcades. According to the Treaty, the federal government lost its power to regulate the sector and individual states now have that role. The distance between two arcades is now regulated and varies between the states. The minimum distance ranges from 50 metres to 500 metres. External advertising is also prohibited.

The Treaty has also introduced a ban on multiple concessions (large arcades). The section of the Treaty dealing with this ban has been dubbed the “guillotine provision” because 50% of the existing gaming arcades will be forced to close their doors.

Germany has one of Europe’s largest gaming machine sectors, valued at around EUR 5.8 billion in GGY in 2015. With the ban coming into place in 2017, GBGC forecasts the sector GGY will fall to around EUR 3.3 billion in 2019. But a beneficiary of the closures could be Germany’s underperforming casinos.

Read more about the world’s casino and gaming machine markets in GBGC’s Global Gambling Report.