ONLINE GAMBLING
“ Many federal states still have not reached a clear decision on how to offer regulated online casino gaming . No legal offer for this form of gaming currently exists in any federal state ”
JULIA LENSING , MANAGING DIRECTOR , DOCV
These figures are backed up by research commissioned by the DSWV , which looked at the amount of time players spent on websites run by licensed and unlicensed operators . Professor Gunther Schnabl , the economist who conducted the research at the University of Leipzig , found players spent roughly 47 % of their time on illegal websites and 53 % on legal ones .
Schnabl also noted that while the prevalence of the white market was diminishing over time , the presence of the black market was growing .
Yield Sec ’ s technology , meanwhile , has tracked around 1,380 illegal operators targeting players in Germany and supported by around 514 affiliates , representing 45 % of affiliates active in the country . Around 70 %, Vali says , are
“ double dippers ”, promoting both legal and illegal sites .
The strategy in some cases has been to sow mistrust around licensed websites , for example by spreading the myth that the five-second spin delay is a sign that a slot machine is rigged . Another strategy is to target players not by brand but by offer , promoting eye-catching sign-up bonuses and free sports merchandise around major sporting events .
The tough regulatory market has also created a scenario where the revenues accrued by illegal operators tend to be 2-3 times higher per player than in the regulated market , Vali explains .
More concerningly , the market is becoming even more saturated . Between Q1 2022 and Q1 2023 , Germany saw a 63 % uptick in illegal
operators active in the market , according to Yield Sec data . In March 2023 alone , around 9.3 million people interacted with an illegal gambling product online , equating to around 13.4 % of the entire population .
This goes to support the suspicions of those operators who are active in the licensed market .
“ There needs to be quite a lot done in order to successfully achieve the main goal of the Interstate Treaty , which is a channelisation rate of almost 100 %,” says the DOCV ’ s Lensing . “ For now , we consider this main aim failed .
“ Illegal operators currently account for half of the entire German online gambling market , meaning that every second player who participates in online gambling is playing on a platform without any player protection at all .”
OUTLOOK FOR 2024 AND BEYOND
Looking ahead to the future of Germany ’ s burgeoning online gaming
ICE LONDON 2024 • ISSUE 135 • 67