A newly issued study, conducted at the behest of the German Online Casino Association (DOCV) and the German Sports Betting Association (DSWV), paints a concerning portrait of the nation’s gambling scene. Authored by University of Leipzig’s economist Gunther Schnabl, the document reveals the limited effectiveness of the State Treaty on Gambling which became operative in July 2021. The legislation’s most pressing objective—to consolidate online gaming activities within the framework of licensed operations—remains but partially realized.
A call to action rose from the findings, with DOCV and DSWV urging Germany’s gambling authority, the GGL, to render the regulated casino sector more viable in comparison. The GGL itself was a creation birthed from the Fourth State Treaty.
To define an illegal gambling website, the study employs distinct criteria. Firstly, if the site is accessible from a German IP address without necessitating a VPN. Secondly, it requires the site to support the German language. Lastly, the option for users to input a German address during registration constitutes the third criterion.
As of March 2023, merely 50.7% of German online players utilized licensed channels for their gambling ventures. A deeper dive into the numbers sheds light on the distribution of the remaining figures: unregulated sites attract substantial traffic, with 28.9% going to unlicensed EU-based providers and 19.9% to unlicensed offshore operators.
The implications of this report are profound, estimating a staggering three-quarters of online gambling revenue being funneled into the black market. This equates to a substantial leak in potential tax revenue, as it spirals into the unregulated abyss totaling hundreds of millions of Euros each year.
One of the pivotal reasons the black market retains a strong foothold is its ease of access. The report accentuates the magnitude of this influence, aggravated further by unlicensed brands proficiently exploiting online advertising avenues.
The study pinpoints overly stringent regulations on stake limitations and reward structures as factors dimming the appeal of lawful operators. Gaming participants, it seems, are venturing beyond the regulated sphere in search of platforms offering greater autonomy in play.
Such findings arrive amidst German regulators’ intensification of safeguards aimed at player wellbeing, including the institution of betting limits, the imposition of player prohibitions, and the proliferation of support offers. A separate study, released last week by Drogenbeauftragter, the Federal Drug Commissioner of the Bundestag, underscored the issue of problematic gambling. This document found that 2.3% of the German populace, aged between 18 and 70, encounter gambling-related difficulties—a figure representing 7.7% of those who gamble, or 1.3 million individuals overall. Furthermore, slot machines emerged as a primary concern, with four in 10 users within the slots demographic facing a heightened risk.
In response to these troubling statistics, DOCV and DSWV galvanized an urgent plea for actionable solutions to address these challenges directly. The proposed action includes a thorough evaluation of the regulatory environment by the GGL, alongside calls for amped-up collaboration among regulated industry figures, the GGL, political entities, and interest groups.
The study proposes two key resolutions: a reformed taxation system and a deregulatory approach. The expectation pinned on these recommendations is to curate a licensed betting environment with sufficient draw to lure players away from illegal options.
During last month’s Bundeskonferenz zum Glücksspielwesen organized by Behörden Spiegel, experts highlighted the menace of the black market to player safety. Wes Himes, executive director of standards and innovation at the Betting and Gaming Council, addressed attendees, signaling that the most potent defense against the unregulated market is the establishment of a robust “competitive regulated market”.
