11.11.2024
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Regulation
Future of Germany’s Gambling Market: Can Regulation Keep Up?
The German gambling market is at a crossroads, struggling to thrive under heavy regulations and the rise of an unregulated black market. Despite ongoing efforts, can legal gambling sustain itself, or will players continue to seek alternatives? Here’s a look at the market's current challenges, potential growth areas, and industry hopes for reform.
Challenges in Germany’s Gambling Regulation
Germany’s 2021 Interstate Treaty on Gambling introduced regulations aimed at ensuring a safe gaming environment, but stakeholders argue that some of these rules are overly restrictive. The issues include:
- - High tax rates on stakes instead of winnings
- - Low limits on stakes and monthly deposits
- - Lengthy processing times for approvals and limited advertising
These rules, though well-intentioned, have led to a stagnant market. Leading industry experts, including Jörg Hoffmann from Melchers & Melchers, describe the market as facing a “standstill.”
The Impact of the Black Market
One of the main concerns among regulated operators is the growth of the black market, as many players are turning to unlicensed sites to bypass restrictions. Studies like the 2023 Schnabl Study suggest that up to 50% of Germany’s gambling market is now unregulated, with users spending time on illegal websites due to limitations in the legal market.
Efforts to Increase Channelisation
The Gemeinsame Glücksspielbehörde der Länder (GGL) aims to channel more players to regulated operators, claiming that 90% of the market is now compliant. However, independent reports estimate this figure to be much lower, around 50%. As a step forward, GGL has begun collaborating with stakeholders to address the black market.
Small Steps Toward Progress
Despite the challenges, some improvements have been made:
- - Expanded Product Offerings: The DSWV is working with the GGL to expand betting markets, adding 200 new options this year.
- - Closer Industry-Regulator Collaboration: Communication between industry bodies and the GGL has opened, leading to proposals for faster approvals and expanded offerings.
Industry’s Call for Proactive Change
Industry leaders hope that the GGL will advocate for further changes, such as revisiting the 5.3% tax rate and reviewing limitations on gaming options. Many believe these adjustments are crucial for long-term survival, as without a competitive legal market, players will continue to be drawn to unlicensed alternatives.
Looking Ahead – Will Germany’s Market Adapt?
With a review of the Interstate Treaty on Gambling set for three years from now, the question remains whether legal operators can hold out against black market competition. Industry leaders are pushing for a regulatory environment that balances safety with market sustainability, making Germany a viable destination for responsible gaming.
