Following a three-month consultation, the European Commission said on Tuesday that the law, which Germany wants to adopt in January, must take account of factors such as judgments by the European Court of Justice last September.
The statement raised hopes that Germany may have to alter its plans, lifting shares in BwinParty and Betfair by 5.5 percent and 2.6 percent respectively by 1329 GMT.
UBS analyst Simon Whittington said the closure of the German market to online gambling companies was now looking more unlikely.
"In our view, this helps decrease the likelihood of a full closure of the German market. We believe operators will continue to trade in Germany if there is any legal uncertainty and (the Commission's) announcement is clearly supportive for operators' arguments," he said.