Gambling Regulation Woes in Germany: A Growing Black Market Threat
Date: 2023-11-23 Author: Dima Zakharov Categories: EVENTS
Regulatory Challenges and Market Dynamics:
The University of Leipzig's report underscores a significant challenge: nearly 50% of online gambling in Germany operates on unlicensed platforms, undermining the efficacy of the State Treaty on Gambling introduced in July 2021. The study identifies key indicators of illegal sites, such as accessibility from a German IP address without a VPN, availability in German, and acceptance of German documents during registration.
The report reveals that only 50.7% of players choose licensed online gambling spaces, with 28.9% opting for unlicensed EU providers and 19.9% for unlicensed offshore providers. The unregulated market, responsible for three-quarters of the revenue, results in substantial tax losses amounting to hundreds of millions of Euros annually.
Factors Driving Black Market Popularity:
Unlicensed platforms remain popular due to their easy accessibility and aggressive advertising campaigns. Licensed sites face challenges, such as stringent restrictions on stake limits and bonuses, making them less competitive. This drives players towards unlicensed alternatives seeking more flexible options.
Rising Gambling Harm:
In response to these findings, the German Online Casino Association (DOCV) and the German Sports Betting Association (DSWV) advocate urgent measures. Their plan involves a thorough review of the regulatory framework by the German gambling regulator (GGL) and increased collaboration between stakeholders to create a more appealing licensed gambling environment.
Despite ongoing efforts to enhance player protection, a Gambling Atlas report reveals that 7.7% of Germans over 18 face social, financial, or health issues due to gambling addiction. 3.3 million German adults are susceptible to gambling addiction, highlighting the need for swift action.
Industry Calls for Reform:
Since September, industry stakeholders have pressed the German government for immediate action. They propose a revamped taxation regime, adaptable regulations, and stricter punishments for unregulated operators to ensure industry sustainability and provide adequate player protections.
