Half of Germany’s Online Gambling Unregulated, Study Reveals

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Challenges in Regulating Online Gambling in Germany

The effectiveness of German online gambling regulation is being questioned by a recent study commissioned by the German Sports Betting Association (DSWV) and the German Online Casino Association (DOCV). The study was conducted by Gunther Schnabl, an economist at the University of Leipzig, which identifies key obstacles and calls for rapid regulatory adjustments.

Regulatory Differences Impact Licensed Operators

According to the study, nearly 50% of online gambling activities in Germany still take place on unregulated platforms, even after the State Treaty on Gambling came into effect in July 2021. Schnabl lists the prominent features of illegal websites, including their user-friendliness, availability in German language, and acceptance of German documents during registration.

The report states that only 50.7% of players are directed to websites offering legal online gambling. About 19.9% of the traffic is directed to unlicensed offshore providers, while 28.9% of the traffic is directed to unlicensed EU providers. It is believed that three-quarters of the revenue comes from the unregulated online gambling business, meaning that hundreds of millions of euros in tax money are lost each year.

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Factors Contributing to the Popularity of the Black Market

According to the study, one of the main reasons for the popularity of the black market is its easy accessibility. Unlicensed companies aggressively advertise their services and attract players who find licensed platforms less competitive due to restrictions on incentives and betting limits. This dynamic leads players to look for more accommodating options on unlicensed platforms, reducing the overall effectiveness of the regulatory framework.

The findings underscore how quickly regulation needs to be changed to address these issues and provide licensed operators with a more level playing field. A swift response is necessary to reduce the impact of unauthorized platforms and make regulated online gambling establishments in Germany more attractive and competitive.

Sources:
Report by Gunther Schnabl, University of Leipzig
German Sports Betting Association (DSWV)
German Online Casino Association (DOCV)

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