German gambling: Can the market be saved?

In January 2023, German's federal regulatory authorities, the next lon g-term wires and conflicts, will understand the management of the market dominated by illegal businesses. IMOZHEN GUDMAN analyzes how the tissue has the ability to change the balance that is advantageous to legal gambling.

Looking at the German gambling market, you can see that online casinos and sports gambling have long been legal.

When the government began to adjust the gambling market for the first time in 2008, it was an attempt to prohibit it rather than a way to liberalization. This was expressed by completely prohibiting the work of the online vertical that remained until recently.

In 2021, a widely accepted gambling agreement in Germany opened the first intensive bazaar of online startups and gambling in Germany. And in early 2023, the Central Regulatory Office opened its own door.

Prior to the conclusion of the latest stat e-o f-th e-art contract, the last change of gambling was made in 2020, and regulatory authorities extended the restrictions on the issuance of sports tariffs and restricted the market to only 20 businesses.

After the 2012 trial, the European Court ruled that the first law on Germany's sports tariff was illegal, and in the next few years, a new shor t-term legislation law, including vague restrictions on license, was passed in Japan. Later, in 2020, there was an argument among the ministers of local governments for several months, revealing an irreparable delay due to the revealed path to new regulations on licensed sports betting.

The state employee devised a gambling state agreement in 2021, with the end of the country's dark bazaar, the need to establish a practical law. The task is to complete the license for online casinos and slots. However, the operator reports that there are still some serious restrictions and gambling markets that have any opportunities they provide.

Europe’s largest economy: A sleeping giant for gambling?

Perhaps the reason why Germany, the coolest economic power in Europe, has a relatively undeveloped bazaar (at least adjustable field) is probably explained to some extent.

The legal Bazaar of German online and gambling compared to the more mature British, which is estimated to be € 12. 05 billion in online games, and the legal Bazaar of German is blamed by tax revenue branches in 2023. Will be about 4. 8 billion euros.

The most surprising thing is that this is happening within the jurisdiction of 84 million people, but in Englan d-65 million ...

Operators say Germany remains a problematic market, but new opportunities are nevertheless emerging. The German Sports Betting Association (DSWV) calls the existing regulatory framework "the most restrictive in the world," and the fight for a fairer, more cooperative framework is still on.

Regulatory challenges

Under the current licensing system, sports betting and online casinos can apply for a license with the GGL and operate legally on any national territory in Germany.

German law firm Hambach & Hambach says the process is relatively smooth and transparent for clients, but strict rules on everything from advertising to the operation of slot machines still make it difficult for license holders.

"The licensing conditions are very strict," explains Wulf Hambach, founder of Hambach & Hambach. "There is a catalogue of license conditions that runs to several pages, dozens of rules only on advertising, and in some cases license conditions that are not in the law but were added later.

Operators in the five regions in particular are deeply unhappy with the way the current regulations are in place.

Restrictive advertising measures

DSWV director Luca Andrich calls the advertising gambling regime in Germany "very strict."

"It is probably one of the strictest, unless you use a monopoly system or completely ban advertising," he explains.

The rules that operators have to pay attention to include a ban on advertising on the Internet and on TV between 9 pm and 6 am, a limit on the display of sports clips in advertising, and a ban on cooperation with athletes and other influential people.

According to Andrich, there are also calls for even stricter regulations.

"Some politicians have started to discuss sports advertising fees, which are the most effective means for legal operators to draw attention to their legal products," he says.

Draconian limits on sports betting markets

Another serious problem for operators is the Dragon Scheme for the provision of a sports betting market.

Currently, the GGL is creating a catalogue of permitted betting, and operators are limited in the sports and markets they can offer. This means, for example, that e-sports (which are not considered sports in Germany) are out of the picture. It also means that strange conditions apply to new and emerging sports.

Rugby, which is gaining popularity on the continent, is available for betting during the Olympics, but not on the European Rugby Championship or the World Team Trophy. In soccer, friendlies are still excluded unless Germany is involved.

Andrich combines the limited supply in regulated markets with the half-empty hypermarkets that were part of Germany's regiments through the GDR. "This is not attractive," he says, "even if buyers from the host country play football and place bets only on a certain number of sporting events."

Also, Lugas has reported that a system predicting sports betting actually adjusts a certain amount of 1 during major sporting events, meaning that operators did not have the opportunity to cultivate bets when they would have the advantage of the opportunity Get with higher odds.

One of the biggest challenges in regulating the gambling business in Germany is the poor access to the licensing scheme for B2B suppliers and game creators. This means that games must be licensed for each operator, including whether they have already been licensed for other operators.

A challenging regulatory regime for online gaming

In the opinion of the German Online Casino Association (DOCV), the system is considered original in Europe and has the potential to bring what are actually considered the same game multiple times.

"One of the challenges is that there are not enough virtual gambling games approved for the legal online market in real time," says Julia Lensing, director of DOCV.

"This rather difficult and ineffective procedure will only solve the illegal black market."

The DOCV also takes into account the "urgent need" to take political measures for the online casino of these games, such as blackjack, roulette, baccaram, etc.

"Many federal states have not yet received a clear conclusion on offering adjustable games in online casinos," Lens said. "In real time, no federal state has made such a legal proposal for gambling.

The DSWV and DOCV emphasize their loyalty to strict rules for player defense, but both associations say that the current framework is contrary to this goal and makes adjustable bazaars the least beautiful for players.

Player protection undermined by unattractive offerings

One of the more vague qualities of the regulations is the limit of the articles of the deposit in the amount of 1. 000 euros for a month, which applies to all autonomous revenues, and also the limit of the commission of 1 euro for slots is considered.

Another problem for the operating company was that the strict rules on the decoration of sites and game decorations were causing many delays and lags to players. This example is that when a player switches between sports charges and casino offers on the operating company's website, they are forced to wait.

In addition, players are forbidden to play multiple games at once, and when they play online slots, they are forced to delay spins for 5 to 10 seconds.

Industry officials argued that such delays would impair the trust of adjustable products, eventually passing players to illegal markets.

According to Wulf Hambakh's legal specialists, taxes are the "biggest problem for regulatory market operators."

A hefty tax burden

Despite all the efforts of both industry groups, the lates t-inte r-parties agreements on online business gambling stipulate the tax rate, not the total game income (GGR).

This has led to a situation in which competitors without licenses are fighting in a saturated market, where licensed operators are fighting to maintain competitiveness. Strangely, tax revenues from online games are declining from the moment of legalization.

One of the main goals of the newly established GGL is to fight the dark market in Germany and achieve high sewer indicators. In the annual report of 2022, regulatory authorities stated that the transition to centralized organizations was "a foundation to succeed in fighting illegal gambling."

The channelisation challenge

"GGL's Benjamin Schwanka c o-chairman is convinced that we can compete well with the illegal gambling market.

According to the agency, fines and court threats, payments and IP address blocks were used for the first time in 2023. However, the court has not yet determined whether the IP address block will be recognized by German law. Illegal companies are usually monitored with hotline that accepts players complaints, but GGL also conducts their own surveys.

According to the latest data announced by the Bureau, Germany has 800 to 900 sites that provide online illegal gambling. These businesses have a market size of 300 to 500 million euros, with a share of approved markets about 2-4 %.

However, experts who carefully investigated the market are violently refuting this figure.

One of them is Ismile Vari, the founder and management director of YIELD SEC. This platform uses the latest artificial intelligence technology that the military used to use for terrorism and extremists in real time in real time.

Questioning Germany’s black market figures

Recently, YIELD SEC recorded illegal market growth in Germany 11 %, with 47 % of the legal market share, which account for the total amount of online and gambling markets.

This number has also been confirmed in the survey results conducted by DSWV. DSWV investigates the time spent on a licensed operator and an operator site without a license. Professor Gunter Sneak, a professor of the Lipetich University, has said that players spend about 47 % on illegal sites and 53 % on legal sites.

Professor Schunable also pointed out that although the penetration rate of the "White" market decreases over time, the "black" market has increased.

Meanwhile, YIELD SEC's technology has tracked about 1380 illegal companies supported by about 514 affiliates, targeting German players. According to Vali, about 70 % are "duals" and advertise both legal sites and illegal sites.

For example, in some cases, a fiv e-second delay is a theory that the slot machine has been remodeled, and in some cases it takes a strategy to attract distrust in licensing sites. There are also strategies that concentrate on proposals, not brands, such as providing attractive registration bonuses and providing free sports items for major sports events.

Vali explains that heavy market regulations also led to the fact that illegal operators receive 2-3 times higher per person than regulated markets.

Even more concerned is that the market is becoming more saturated. According to Yileld SEC, Germany has increased the number of illegal operators in the market between the first quarter of 2022 and the first quarter of 2023. In March 2023 alone, about 9. 3 million people were interacting online with illegal gambling products, equivalent to about 13. 4%of the total population of the country.

German black market gambling booming

This supports the intuition of operators who are active in the license market.

"In order to achieve the main goal of the agreement, it is necessary to achieve the almost sewage treatment level," Docv says. At this time, we don't think this main goal will be achieved. "

"Currently, illegal shares account for half of the German online gambling market." In other words, all the second players participating in online gambling are playing on a platform without player defense. I will.

Looking at the rapidly developing online games in the German industry, it is unlikely that the main problems will be solved in the coming years. Gambling's current parties have expired in 2027, and the broken process for formulating the rules is an experience that the national leaders do not want to repeat.

The outlook for German gambling in 2024 and beyond

In 2026, GGL announces an evaluation that evaluates whether the agreement has achieved its goals. In addition, Germany has two more research on advertising and gambling, and regulatory authorities will not want to intervene in the existing framework for at least several years.

In an interview with Igaming Business, GGL representatives stated that they are working on standardization of game license procedures so that new games will be approved earlier. He also wants to enhance the procedure to fight illegal gambling and achieve legal clarification on whether IP address blocking can be used to fight dark sites.

According to Hambach's legal professional expert, there are few criminal cases for illegal contractors a sign that GGL does not have enough measures to fight the dark market.

At present, in the German politics, the voices of gambling disinfects seem to be more prominent than the voices that support the free framework.

Calls for further restrictions

Nevertheless, despite the lack of regulations, businesses continue to have hope in the medium term.

"On the other hand, the German market has a great potential to be a pioneer in Europe. We do not allow this possibility.

However, in the short term, there is little expectation that a major change can be achieved until 2027. Therefore, this goal will continue to apply political pressure to improve regulations and efficiently suppress the dark market.

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