Half of online gambling in Germany is conducted through offshore sites, a study shows
The market has been slow to develop after Germany introduced gambling reforms several years ago aimed at unifying the country's fragmented gambling laws. This could cause significant damage, as a new study suggests that around 50% of online gaming takes place on black market sites.
The findings of Leipzig economist Gunther Schnabl in his "Country Treaty on Gambling Missing Targets" paint a picture of the instability in Germany's gambling market. Interestingly, most players do not pay attention to the license status of the iGaming platform.
Against the backdrop of these developments, interest groups are calling for constitutional reform of the gambling framework. According to the national gambling regulator (GGL), the research does not reflect reality.
Unified game rules do not work
The analysis looks at players’ consumption behavior habits. It also examines the dynamics between those who insist on legal methods and those who resort to illegal means. DOCV and DSWV sponsored the study as representatives of the German Online Casino Association and the German Sports Betting Association.
Research shows that in 2019, about 70% of online gamblers used authorized platforms. That number has now dropped to 50%. According to the study, this decline can be attributed to the large presence of clandestine online black markets that lure players with tempting offers and ruthless advertising.
DSWV claims to have lost hundreds of millions of euros in tax revenue. This affects state governments and also jeopardizes player safety.
GGL disagrees. Its website says there are around 800-900 websites offering unlicensed gambling services in Germany. It went on to say that this figure was down compared to the previous year. This is still a significant increase compared to the number of licensed platforms (around 50).
The regulator also said the segment represents about 3% of the total available market and is worth up to 500 million euros ($545 million). This is a huge amount of money, with the federal and state governments getting a large percentage.
At least two German states, including Thuringia, chose monopolies when they set out to design their online gaming markets. As other countries such as Finland have realized, this is a failed solution that will lead to user churn.
Licensed online gambling operators in Germany are also at a disadvantage compared to their overseas counterparts. Reforms to the Horse Racing Betting and Lottery Act 2021 will introduce a 5.3% tax on all bets placed on betting, online poker and online slot machines.
Another game reform
In light of this research, DSWV is calling for change. She wants to see a rapid expansion of licensing, increased competition, effective regulation of advertising and the implementation of tax reform.
GGL attempts to force ISPs to block websites, but this is illegal.Earlier this year the court ruled that "there is no legal basis for state joint gaming authorities to order access providers to block foreign gaming operators' websites."
Perhaps the German iGaming market is experiencing growing pains that will resolve themselves over time. However, DSWV does not want to wait. The aim is to strengthen links between the different sectors that come into contact with the gaming industry, including operators, GGLs, legislators and stakeholders.
She also believes it might be appropriate to review the National Gambling Treaty. That could pose an even bigger challenge, as Thuringia and other states with gambling monopolies are reluctant to consider changes that could jeopardize their status.
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Source: www.casino.org
