In a comprehensive review of Germany’s gambling landscape for 2023, new data reveals that the black market has managed to secure between €400 million and €600 million in revenue over the period. This significant figure contrasts with the legal market, which reported a Gross Gaming Revenue (GGR) of €13.7 billion, reflecting a modest 2% annual growth.
Throughout the year, the German gambling regulator, the Joint Gambling Authority (GGL), has been busy scrutinizing a staggering 1,864 websites. During these investigations, they found cause to block operations in 133 instances. Of these actions, 87 were related to illegal gambling services, while 46 were connected to the advertising of black-market operators. Altogether, GGL processed a total of 438 cases of suspected illegal gambling or advertising, underscoring the scale of the issue they are confronting.
Significantly, of those flagged for offering illegal services or advertising, 63 black market operators ceased their operations or stopped advertising as a result of hearings or prohibition orders issued by the GGL over the past year. The regulator noted that many of these non-compliant operators are often based outside the European Union, making enforcement a complicated task.
In an attempt to enforce these prohibition orders, the GGL levied two fines of €50,000 each. However, the battle against illegal gambling is not just limited to blocking and fines; the regulator has also found itself embroiled in up to 117 lawsuits initiated by various online gambling providers representing different sectors of the market. This litigious environment further complicates Germany’s efforts to maintain a well-regulated legal gambling market.
The GGL’s 2021/2022 report had already indicated the prevalence of illegal gambling activities. During that period, 157 instances of illegal gambling and unauthorized advertising were flagged, leading to 68 prohibition proceedings. The consistency in these figures shows a persistent challenge for the regulator.
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Within the legal market, online gambling operations contributed 8% or €400 million to the GGR in 2023. Sports betting also marked its presence, accounting for a turnover of €1.8 billion, thereby capturing a 13% share of the overall market. These figures demonstrate that there is a steady, if cautious, growth within the legal sphere.
One of the key hurdles cited by the GGL in this report was the delay in the game testing process before they could be released into the market. These delays were attributed to suppliers not providing necessary information in a timely manner, or in some cases, not at all. To address this bottleneck, temporary resources were hired to expedite game testing, which resulted in a substantial improvement by the first half of 2024, according to the regulator.
Germany’s gaming regulation framework, established under the 2021 Interstate Treaty on Gambling, created a comprehensive online betting and gaming market for the first time. However, as the GGL went operational at the beginning of 2023, it has faced significant critique. Various stakeholders within the industry have argued that the regulatory environment is not conducive to commercial operators.
The German Sports Betting Association (DSWV) has been particularly vocal, describing the current regulatory framework as “the most restrictive in the world”. These constraints have made it difficult for new and existing operators to thrive in the legal market, potentially pushing some towards the more unregulated black market.
In summary, while Germany’s legal gambling market showed modest growth in 2023, the presence and persistence of the black market remained substantial. The GGL’s enforcement actions and regulatory hurdles illustrate the ongoing challenges faced in establishing a robust and compliant gambling ecosystem. Going forward, the effectiveness of Germany’s regulatory framework will be critical in shaping the future of both its legal and illegal gambling markets.
