Germany is still plagued by illegal gambling operators. This has led to lower revenues from licensed gaming verticals. This is a serious problem with which the European country has struggled for some time.
According to the German Sports Betting Association (Deutsche Sportwettenverband/DSWV), legal sports betting declined in 2022 in spite of the FIFA World Cup which bolstered operators’ revenues in other markets. German gambling companies suffered a decline in revenues, raising serious concerns about the future of legal betting in the country.
In 2022, German sportsbooks earned $8.7 Billion (converted from Euro, current rate) which is a 13% decrease from the $10 Billion it earned in the previous year. The state revenues from sports betting tax fell to $460 million.
DSWV says tight regulations are to blame
DSWV pointed out that the suboptimal results were due to Germany’s early exit from the World Cup and the restrictive market regulations. Germany created a set of rules that make it difficult for operators to maintain sustainability in its attempts to protect customers from gambling harm.
Additionally, some people have been pushed to the black market by the regulations. The DSWV says regulations do not help people save money. Instead, people gamble the same amount elsewhere. Recent studies confirm this with a 65% increase in illegal gambling.
Another issue is the lack of variety in the legal German market. Although it does offer several sports betting sites, many only offer limited markets. Customers are also limited in their choice of online casino, poker, and slots games.
Mathias Dahms is president of DSWV.
Most customers don’t care if a provider is licensed in Germany. Customers are searching for the best offer, the best odds, simple payment processes, and interesting bonuses. This is where legal offers are most difficult to find.
Mathias Dahms, president, DSWV
The Union Argues That Ads aren’t so Bad isn’t so bad
Germany’s restrictions on gambling ads is another thing that hinders the legal market. The global regulated gambling industry is hot on the topic of gambling ads. Many regions want to prevent non-gamblers being bombarded by gambling content.
Restricting ads can have a negative effect on existing gamblers who are not afraid to pick an illegal operator despite the associated risks.
DSWV found that people mistakenly believe that more advertisements equals more gamblers. This notion has been proven wrong in certain markets, such as Denmark and the UK.
Luka andric, CEO at the DSWV also spoke out on the subject. Advertising is useful in letting people know which sites are legal and offer player protections. Andric stressed the importance of advertising responsibly and not allowing self-excluded individuals to receive ads.
DSWV hopes Germany can strike a delicate balance between protecting its customers, and keeping the black market at bay.
