The newly appointed has claimed its institution has been nothing but smooth sailing. However, feedback from industry panellists at the 8th Federal Congress on Gambling in Berlin might prove otherwise.
In recent reports, the German Gambling Regulator was incredibly optimistic about the smooth rollout of the newly licensed market and the controls that have been put in place. However, during the 8th Federal Congress on Gambling, which took place in Berlin earlier this month, its industry peers, including the Betting and Gaming Council (BGC) and Rootz Ltd, began to point out the problems with the market, specifically its channelisation, restrictive player rules, and lacklustre B2B licensing and processes.
Restricting Player Choices Bolsters Illegal Gambling
Several speakers at the recent gambling conference in Berlin warned the German Regulator that their restrictive player-facing rules would only lead to diminishing channelisation rates over time.
BGC representative Wes Himes explains:
Quote“The best antidote to the illegal market is a competitive, regulated market.”
The local market limitations are:
The claim is that the limitation put in place by the Gambling Authority will cause local players to seek out welcome bonuses, higher bet settings, tax-free gaming, and the option to deposit as much as they want to at black market gambling sites.
Licensed Online Casino Shares Data Supporting Data
Casino operators rarely share their data as it gives competitors an understanding of how they are performing in a competitive industry. However, Sam Brown, CEO of Rootz Ltd, shared the company’s experience of player deposit values under the new regulations, and it fully supports the concerns raised by Wes Himes.
According to Brown, in the run-up to market regulation, the casino recorded average deposit values of €350 per player, which resulted in €141 in gross gaming revenue. Under the current market conditions, the deposit average declines to €150 and gross gaming per player to only €73.
The most concerning figure, however, was the market channelisation rate. Once the market was regulated, only 10% of their player base continued to gamble with them. Brown commented that “they haven’t stopped gambling", pointing to his belief that 90% of their players now frequent black market casinos.
Brown went so far as to hypothesise that more than 80% of all online slots played in Germany are being played at unregulated sites.
The Lack of B2B Processes Hamstrings Licensees
With the importance of channelisation and the reality that the current deposit and play limits favour black market operators, licensees raised concerns that even something as simple as adding a new game to their offering is a chore.
There is currently no B2B licensing process in Germany allowing casino software developers to have their games licensed and distributed to licensed casinos. Instead, each casino needs a license to offer slots and approval for each slot it wants to offer.
This has resulted in developers having games live outside of Germany while still needing to be approved for local play. This encourages players to seek out these new releases at offshore sites where they are available on launch.
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