The study was commissioned by the German Online Casino Association (DOCV) and the German Sports Betting Association (DSWV). It was authored by economist Gunther Schnabl of the University of Leipzig. The report states that the State Treaty on Gambling, which came into force in July 2021, is failing to ensure that all online gaming takes place on licensed sites. As a result, the DOCV and DSWV have called on Germany’s gambling regulator (GGL) to make regulated casinos more competitive.
The study defines an illegal site based on several key criteria. First, the offer can be accessed from a German IP address without using a VPN. Second, the offer is available in German. Third, the site accepts a user’s German address during registration. According to the report, only 50.7% of players were channeled towards regulated online gambling in March 2023. Black market sites accounted for 28.9% of traffic to unlicensed EU providers and 19.9% to unlicensed offshore providers. The study estimates that the black market generates three-quarters of online revenue, resulting in an annual loss of hundreds of millions of Euros in tax revenue.
The report highlights that the popularity of the black market is due to its ease of access for players, as well as online advertising conducted by unlicensed brands. It also emphasizes that excessive restrictions on stake limits and bonuses reduce competitiveness, driving players to seek more flexible alternatives. In a separate study, it was found that 2.3% of Germany’s population between 18 and 70 years old suffer from gambling harm, with slots being the highest contributor. The urgent action plan presented by the DOCV and DSWV calls for a review of the current regulatory environment by the GGL and greater collaboration between the regulated industry, GGL, political bodies, and interest groups. The report also suggests an improved taxation regime and more flexible regulation to make the licensed environment more attractive to players.
At Behörden Spiegel’s Bundeskonferenz zum Glücksspielwesen, attendees were warned about the threat the black market poses to players. Wes Himes, executive director of standards and innovation at the Betting and Gaming Council, stated that the establishment of a competitive regulated market is the best way to fight the illegal market.
