In its 2023 annual report released on Monday, 1 July, the German gambling regulator Gemeinsamen Glücksspielbehörde der Länder (GGL) revealed that illegal gambling revenue accounted for up to 4% of the overall German market. The black market generated between €400 million and €600 million in gross gaming revenue (GGR), defined by the GGL as player losses, compared to the legal market’s €13.7 billion total for the year. Of this, €3.0 billion was generated online.
Sports betting dominated the online total, contributing €1.8 billion, while online slots and poker accounted for a much lower €400 million. Throughout the period, up to 1,864 websites were checked, and in 133 instances, the regulator proceeded to block operations. Of these, 87 related to those offering illegal gambling services, while 46 were connected to the advertising of black-market operators.
Overall, GGL processed a total of 438 cases of suspected illegal gambling or advertising during the 12-month period. Of those flagged, 63 black market operators ceased their services or advertising as a result of hearings or prohibition orders made by GGL. The regulator noted, “Those providers who do not discontinue their services despite prohibition orders are often based in countries outside the EU.”
To enforce the prohibition orders regarding illegal gambling and advertising during 2023, the GGL imposed two fines of €50,000 each. The report also mentioned that the regulator was embroiled in up to 117 lawsuits initiated by various online gambling providers across different verticals.
In comparison, GGL’s 2021-22 report flagged 157 instances of illegal gambling and advertising illegal gambling, with 68 prohibition proceedings initiated. Within the legal market, online gambling accounted for 8%, or €400 million, in GGR in 2023, while sports betting contributed a turnover of €1.8 billion, with a 13% share of the overall market.
Commenting on the licensing process, the GGL admitted facing delays in testing games before they went to market, attributing this to suppliers not providing information on time or at all. The regulator stated, “Resources were temporarily hired to provide temporary support with game testing. This led to a substantial improvement within the first two quarters of 2024.”
Germany’s gaming regulation, the 2021 Interstate Treaty on Gambling, created a comprehensive online betting and gaming market in the country for the first time. At the start of 2023, the central regulatory authority, the Joint Gambling Authority (GGL), commenced operations.
The current regulatory framework has faced criticism from many industry stakeholders, who argue that the market is not friendly to commercial operators. Numbers from other sources suggest the regulator’s figures potentially ignore a far larger black market issue. For example, a November 2023 study by Gunther Schnabl of the University of Leipzig suggested around 48.8% of players still gambled via offshore sites. Commissioned by the German Sports Betting and Online Casino Associations, the study also estimated up to three-quarters of online revenue was generated offshore.
The German Sports Betting Association (DSWV) described the current regulatory framework as “the most restrictive in the world.”
By fLEXI tEAM
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