The newly strengthened German regulator, Die Gemeinsamen Glücksspielbehörde der Länder (GGL), has issued an analysis of 2022 tax data, revealing that 95% of bets are placed with legal providers.
The report was produced in response to a news release by the sports betting trade organisation German Sportwettenverband (DSWV). The lobbying organisation cited its own numbers in the statement to suggest that the regulated market was substantially smaller in 2022 compared to the previous year, citing the surge in popularity of unlicensed operators as a result of unduly severe regulation.
According to the agency, this conclusion "does not correlate" to its own findings.
“According to our market analysis, the channelling rate is well over 95%, which means that apart from less than 5%, the betting stakes are placed with the permitted sports betting providers according to the tax data of the federal ministry of finance,“ said GGL CEO Ronald Benter.
While the GGL did not dispute the DSWV's assessment that the entire size of the German sports betting market dropped in 2022, decreasing 5% from 2021 to 2019, this was not primarily due to black market companies eating into the regulated market, according to its own analysis.
It claimed that as the number of sporting events dropped dramatically beginning in the spring of 2020, many contests, including the UEFA European Championship, were postponed until 2021. As a result, revenues increased 16% in 2021 compared to the previous year.
The GGL further claimed that the 2022 downturn was unintentionally caused by the FIFA World Cup. A number of circumstances, notably the fact that the tournament was held in Qatar, meant that the sporting event failed to inspire the passion that the German public would have expected. It should be mentioned that several players were generally negative of the tournament's proceedings.
The growth of the illegal market
“We cannot find any crowding out of legal offerings by illegal offerings,” said board member Benjamin Schwanke. “The illegal websites mentioned by the DSWV are known to us and will be prosecuted under gambling law and, if necessary, passed on to public prosecutors, tax offices and the Central Office for Financial Transaction Investigations (FIU).”
Also, there are stationary betting agencies that do not have approval from the federal states but are nonetheless in operation. It is the responsibility of the federal states to take action against these unlicensed betting establishments.
Schwanke claimed that the DSWV's desire for looser limitations and a rethink of regulation stems from the rigorous gambling standards enshrined in the 2021 State Treaty on Gaming, which established the German national gaming market.
“This may give the subjective impression that the providers are restricted in their actions by these rules,” he said. “However, the numbers speak a different language. The regulation has no economic impact.”
The GGL also stated that it is in discussions with industry stakeholders to see whether any changes to the legal framework are required. It said that any necessary adjustments must be proven.
“The GGL is picking up speed in the fight against illegal gambling, including in the area of sports betting and related advertising. We will make success measurable on the basis of the data collected at GGL,” added Benter.
Earlier this week, the regulator asked licenced operators to work together more closely in order to improve the operation of the country's gambling market.
By fLEXI tEAM