Germany’s Shaky First 30 Days as a Regulated Gambling Market

The beginning of August officially marked the end of Germany’s first month as a regulated online gambling jurisdiction. In many new gambling regions, we thought it would be insightful to see what value the new German State Gambling Treaty (GlüStV 2021) has added to the German gambling industry.

 Online Revenues Plummet

A review of the revenue generation potential in the German market under the new online gambling regime does not tell a pretty tale. Licensed operator Bet-at-Home recently reported a distressing 9% decrease in revenue thanks to the restrictive regulations being enforced in the region.

“Although long-term legal certainty was gained in the core market of Germany as a result of the licensing, the upcoming implementation of cross-product monthly betting limits for online sports betting and online gaming is likely to lead to further revenue losses in Germany in the coming months.”

These limiting restrictions include:

• The average player will be limited to €1000 in spend per month
• Depositing will be restricted until players pass new verification checks
• The Regional Council will control approval of betting markets
• Live betting is severely limited to the next scorer and the final result

In addition to these limitations the online casino specifically was hard hit when it was announced that the State Treaty would also enforce a ban on the popular table games, blackjack and roulette.

 Local Gambling Giant Buys WestSpiel

While online casinos and betting sites scramble to adjust to the newly minted regulatory framework the German gambling company, the Gauselmann Group, managed to finalise its bid for the WestSpiel casinos in Nordrhein-Westfalen.

The approved purchase is a landmark event in the gambling sector as it signals the end of the government's monopoly on gambling in the country’s largest federal state. While it is of interest that the purchase gives the Gauselmann Group control of four land-based casinos with the option to build two more it also puts them in a position to offer online blackjack, roulette and baccarat.

In an interesting development, the State Treaty bans all “online-only” operators from offering these “bankholder games”. However, it makes allowance for operators who hold a casino license in Germany’s federal states to legally offer those same casino games, giving them a distinct advantage over their offshore competitors.

More Harm Than Good

Other than finally deciding on Anne Poggemann as the new Chair of the Board of the German Gambling Authority it seems that the new regulatory authority has only managed to harm the financial viability of its offshore operators and unfairly elevate the prospects of its local casino operators.

While they might officially have put the state monopoly to bed in favour of a multi-license market it is clearly not an even playing field. Slots do not hold the same market share in Germany as they do in other Western markets.

It is widely known that German gamblers gravitate towards table games, by using the new State Treaty to reserve these games for local casino owners Germany is making its disdain for international operator’s crystal clear.