The importance of legal compliance in the gambling industry was emphasized by Wes Himes of the Betting and Gaming Council (BGC). He stated that a competitive regulated market is the best solution to combat the illegal market. Germany’s successful and collaborative approach to gambling regulation, as demonstrated by the Gambling Act white paper, is seen as a model for fine-tuning regulations.
In contrast, critics have expressed frustration over the slow progress of regulatory reform in Great Britain. However, the emphasis on moderating rather than prohibiting gambling activity in the British market has gained support. Affordability checks, although seen as intrusive by some, provide a personalized compromise that Germany lacks.
The impact of re-regulation on the gambling industry was highlighted by Sam Brown, the CEO of Rootz gaming company. He explained how the rise in illegal online play has coincided with re-regulation. The introduction of stricter measures such as deposit and staking limits has contributed to the growth of the black market.
Harm prevention should be the responsibility of operators, according to Brown. He emphasized the need for a personalized approach to player protection, rather than relying on blanket restrictions like those in Germany. Brown estimates that around 80% of online slot play is happening illegally.
Yannick Skulsky of Hambach & Hambach, a gambling law specialist, pointed out the challenges faced by legal operators. Regulations make it difficult for them to release new titles, while black market counterparts can easily do the same. Certification requirements and licensing delays create obstacles for legal operators.
Attempts by players to recover gambling losses from unlicensed brands are not proving to be a deterrent. Germany’s long delays in implementing its State Treaty have led to court cases and claims against operators. However, a Supreme Court ruling may potentially change the outcome of these claims.
Illegal gambling is prevalent across all channels in Germany. Burkhard Blienert of the Federal Council on Addiction and Drug Issues highlighted the growing illegal gaming machine market and the rise of unlicensed Kaffe Kasinos. Law enforcement experts point out that illegal gambling remains highly profitable and a popular method of money laundering.
While there is a desire at the government level to tackle illegal gambling, there is also a recognition of the need for strict controls on the regulated market. The debate around sports betting advertising and loot boxes raises concerns about their potential harm, similar to the discussions in Great Britain.
However, operators and associations argue that Germany’s strict regulatory measures are benefiting the black market instead of the regulated market.
