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The Future of Online Gambling in Germany
By Shane Addinall Feb 08, 2022 IndustryGerman gamblers may eventually have a clear view regarding federal igaming legislation, although some already choose approved operators to play at. Last year’s revenue proves that Germany’s regulated market has great potential.Germany announced in 2020 that its sixteen states agreed on amending gambling laws in the European country. In July 2021, they published new regulations in the form of the fourth Interstate Gambling Treaty (GlüNeuRStv) and operators had to step in line for their chance to become licensed.
For the first time, Germany’s grey igaming market moved toward a safer online gambling space for their players, while sports betting and slot operators could apply for licences. Notwithstanding Covid-19 related setbacks, German punters migrated to approved online gambling channels in their masses.
According to Regulus Partners, the past HY tax returns indicate the German nation’s gambling market reform and predict just how successful it may become.
For the Players
The primary goal of the regulated online gambling market is for the federal states of Germany to have unified guidelines on the best strategies to protect their gaming citizens. Ruthless black market operators expose players to financial losses and risky gambling habits. The GlüNeuRStv prohibits certain types of advertising and stipulates deposit and wagering limits for specific games.
Traditionally, German players lean more toward casino gambling than sports betting, and ironically, the country implemented regulations for the latter long before that of online casino games. Regulated Online Slots and poker verticals fared much better than expected, with the online slot segment already compared to that of Italy. Revenue for German online poker roughly matches Brittain’s numbers.
These numbers come as a surprise when we consider that punters in Germany face online RTPs of approximately 90% from regulated sites, in comparison with a global market average of 96%. The low returns are linked to the 5.3% turnover tax enforced by the GlüNeuRStv laws. Considering these facts, it is clear that players in the country prefer safe and regulated gaming, and figures show they favour online platforms over land-based facilities.
Drawing the Eggs Back Into the German Basket
The lack of solid legislation pushed German punters toward black market operators. This caused huge revenue losses for the Federal government, which finally saw the light in providing safe and regulated gaming to players who already gamble outside the nation’s borders.
Since July last year’s authorisation of online slots and poker, the government enjoyed a €540 million windfall from tax returns for regulated slots alone. Online slots and poker currently have run-rate revenues of €800 million and €100 million respectively, with trends showing only prospects of improvement. The regulated online gambling market is already bigger than the retail betting market and is equal to the land-based casino market if compared to pre-covid statistics.
A Work in Progress
Industry experts still believe that the country’s heel-dragging to announce a federal regulator and their tax expectations fuels less scrupulous operators and illegal platforms to take advantage. As it stands, Germany has two regulatory bodies for online wagering. Saxony Anhalt licences and supervises online slot and poker operators. The state of Hesse had the responsibility of issuing sport betting licences through their Regional Council of Darmstadt, but this changed recently.
From January 2023 Gemeinsamen Glücksspielbehörde der Länder (GGL) a.k.a ‘The Joint Gambling Authority for German Federal States’ takes on the responsibility of governing German gambling. Darmstadt no longer handles betting licences, and Saxony Anhalt continues to supervise and manage online casino licences. Individual states have the authority to alter online casino protocols to include other games, but it is yet to be revealed whether this will happen.
Score in a Shifting Goal Post
Domestically regulated online gambling in Germany still has a way to go before it reaches stability. Operators are uncertain of their future obligations and some say that players may relapse to offshore sites with better payout schemes. Hypothesis aside, should the German regulated igaming market continue at its current trajectory, the Government will reap the fruits and law-abiding operators will have to comply for their piece of the cake.
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