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FEATURE
Julia Lensing . This , she adds , is down to the system of licensing games individually for each operator .
“ This very complicated and inefficient procedure only strengthens the illegal black market .”
The DOCV also sees an “ urgent need ” for political action on online casino games such as blackjack , roulette and baccarat .
“ Many federal states still have not reached a clear decision on how to offer regulated online casino gaming ,” says Lensing . “ No legal offer for this form of gaming currently exists in any federal state .”
Although both the DSWV and the DOCV emphasise their commitment to stringent player protection rules , both associations say that the current framework is working against this goal by making the regulated market far less attractive for players .
One particularly controversial aspect of the regulation is the blanket deposit limit of € 1,000 per month , which applies to everyone regardless of income , and the € 1 stake limit on slots .
Another issue for operators has been the tight rules on website and games design that create multiple lags and delays for players . One example of this is an enforced wait time when a player switches between the sports betting and casino offer on an operator ’ s website .
Additionally , players are barred from playing more than one game at a time and must sit through a 5-10 second spin delay when playing online slots .
Industry stakeholders argue that these delays erode trust in regulated products and can ultimately drive players into the hands of the illegal market .
Ismail Vali , CEO of Yield Sec
HEFTY TAX BURDEN
According to legal expert Wulf Hambach , tax has been a “ major challenge ” for operators in the regulated market .
Despite the best efforts of both the trade associations to fight against it , the latest Interstate Treaty on Gambling sets out a tax on stake for online operators , rather than on Gross Gaming Revenue ( GGR ).
This has created a situation where operators with licences struggle to remain competitive in a market saturated with unlicensed competitors . Ironically enough , tax revenues from online gaming continually declined since legalisation .
One of the primary goals of the recently founded GGL is to tackle the black market in Germany and achieve high rates of channelisation . In its 2022 annual report , the regulator stated that the move to a centralised authority had “ laid the groundwork for the successful fight against illegal gambling ”.
“ We are confident that we will successfully push back the illegal gambling market ,” says GGL co-chair Benjamin Schwanke . “ No challenge is too small for us and we do not shy away from the big players .”
According to the authority , methods such as payment and IP blocking were used for the first time in 2023 – although the courts are still undecided as to whether IP blocking is allowed under German law – alongside threats of fines and legal action . Illegal operators are usually tracked down via comments made on a complaints hotline for players , although the
514
Number of affiliates driving traffic to unlicensed sites ( source : Yield Sec )
9.3m
Number of players interacting with illegal sites ( source : Yield Sec )
gambling authority also carries out its own investigations .
Going by the latest figures published by the authority , there are currently between 800 and 900 websites offering illegal online gambling in Germany . These operators account for a market volume of € 300m- € 500m and make up around 2 % -4 % of the authorised market .
These figures , however , are hotly contested by experts who have taken a closer look at the marketplace .
BLACK MARKET FIGURES
One of these is Ismail Vali , founder and CEO of Yield Sec , a platform that uses state-of-the-art AI technology previously adopted by the military to fight terrorism and radicalisation to map the realtime growth of illegal and legal online gaming markets .
Most recently , Yield Sec charted an 11 % growth in the illegal market in Germany , giving it a 47 % share of the total marketplace for online betting and gambling , compared to 53 % legal .
66 • ISSUE 135 • iCE LONDON 2024