The German consolidated gambling authority, GGL, has made public today its annual report for 2023 and it has been established that illegal gambling share was up to 4% of a total German market. Its study established that between the time in question, the black market generated between €400 million and €600 million in GGR, while at the same time, the legal markets generated a combined €13.7 billion for the year.
The GGL’s conclusions are illustrative of current difficulties German authorities encounter in preventing and eliminating unlawful gambling activities. When it comes to online gambling, throughout the year the regulator reviewed 1,864 sites and moved on to block 133 operations, including 87 of gambling companies which offered their services illegitimately and 46 sites which advertised black sheep operators. Collectively, the GGL screened 438 instances of suspected unlawful gambling or advertising over the course of a year.
The report also explained the regulator latest approach on enforcement where 63 black market operators stopped their services or advertising after hearings or prohibition orders. During the year, the GGL used two fines of €50,000 each to address prohibition orders involving unlawful betting and promotion during the year. But the regulator found out that while most of these prohibited providers do not cease offering their services, most of them are located in countries outside the European Union, making it even more difficult to block them.
Thus, in the legal segment, online gambling generated GGR of €400m or 8% in 2023 and, sports betting a total turnover of €1.8bn or 13% of the overall market. The GGL met some challenges with regard to getting licenses, especially when it came to youth testing games before releasing them to the market. This was due to suppliers failing to respond, or respond in time, thus the regulator had to source extra labour to support gaming testing.
That is so because according to the GGL’s report, the black market is not actually as large as it is deemed, but various industry players have cast doubts regarding the actuality of these numbers. According to a survey conducted by Gunther Schnabl of the University of Leipzig in November 2023 which was commissioned by the German Sports Betting and Online Casino Associations, 48.8 percent of the players continued to gamble in offshore sites. The study also extrapolated that up to £75% of online revenue might be generated offshore suggesting that the black market problem could be way worst than what is estimated by the GGL.
The disparity between what the regulator says and the numbers that industries claim underlines the ever-extending debate over Germany’s legal structures, which the German Sports Betting Association (DSWV) has referred to as the world’s most stringent. Opponents also claim that because of deposit limits, stake limits and high taxes, the players are turning to the unregulated operators from other jurisdictions that are willing to offer more appealing terms.
While Germany remains to puzzle its population and legislators over how to regulate the gambling market effectively, the report released by the GGL offers a snapshot into this position, of the fine line between the protection of the consumer and the opening up of a given market. The coming years may witness further elaboration of the special regulatory profile of I-gambling as various authorities and industry participants strive to eliminate the problem of the black market in gambling and to support the development of a lawful but more importantly sustainable and socially responsible sector.