The number of people in the gambling sector in German is quite alarming because there is no legal regulator except in Schleswig-Holstein state. Even though the market isn’t strictly restricted, many people choose illegal wagering probably because it has a variety of entertainment: they simply find casinos ohne Lizenz in Deutschland without any problem. But in 2021 the regulation of online gambling will be implemented in Germany.
Online gambling keeps overwhelming the Germany authorities because it is illegal. Many people take advantage because those who break the rule go unpunished unless you choose a casino outside the EU. The deal allows the Germans to spin the reels at the foreign sites which accept them.
The gambling industry brought in a Gross Gaming Revenue of 14.2bn Euros in 2018 with over 200,000 employees. According to The Handelsblatt Research Institute, 10bn euro came from offline casinos and over 3bn euros from the growing online market. Between 2015 and 2017, the Compound Annual Growth Rate (CAGR) was +4.2%.
Sports betting, gaming machines, and casinos are the popular wagering activities Germans like to engage in. In online gambling, the case is not different with sports betting gaining 38%, casino entertainment 34% and poker 24%. Wagers not only place their bets on football but also in tennis, horse racing, ice hockey, handball, and basketball.
According to the German Center for Addiction (DHS), the number of addicts, and the level of irresponsible wagering is manageable. In 2018, the total number of problem gamblers was 0.56% in the country. This represents a total number of 325,000 citizens with 0.31% being seriously affected.
Current Gambling revenue in German and the future
Gambling is one of the major sources of revenue in German. The country hopes to hit a target of 3.3bn euros by 2024 according to Goldmedia consulting and research provider. The report predicts that the gaming revenue would rise from 2.2bn euros in 2019 to 3.3bn euros by 2024.
In 2019, the turnover across all verticals and products increased from 850m euros to 16.3bn. 42% was accounted for gaming machines as the most profitable assets. Sports betting and online casinos marked the highest growth from 10.6% in 2018 to 18.6% in 2019. The COVID-19 pandemic is however predicted to hit the revenue hard with a drop of 12.9% in 2020.
In addition to the report, Goldmedia surveyed approximately 400 existing online gaming customers across the country. 62% of the respondent preferred to wager with a locally licensed operator despite the upcoming tougher restriction. 38% represents those who opted to continue spinning the reels with unregulated operators who are licensed by regulatory bodies outside Germany.
According to the survey, 32% of the respondent engaged in online slots weekly while 12% couldn’t quench the thirst for daily wagering. The majority of the players use their smartphone to access the online slots. Respondents said that advertising contributes to 38% awareness while referral from friends and social media accounts to 28% and 9% respectively.
81% of the respondents in the survey revealed that customer protection like the deposit limit was comfortable and they agreed with their spending habits. About 52% spent under 50 euros per month on online wagering.
2012 German Gambling Regulations
In March 2020, German heads of the state first approved the legislation to introduce online gambling regulation. The legalization of online casinos, poker, and sports betting is expected to kick off on 1st July 2021. GluNeuRStV based in Sachsen-Anhalt is the new regulatory authority that will supervise the market.
Until the approval of the GluNeuRStV bill by each of the Germany states and the European Commission, online betting in Germany will remain illegal. The third State Treaty still holds power over the market until 30th June 2021.
Despite the new regulations, the following restrictions on Germany’s online gambling market must be adhered to;
Enforcement and validity
Nordrhein-Westfalen and Berlin’s states are working hard currently to see the finalization of the legislation. Once finalized, the 16 local state parliaments must approve it. The two states are also expected to come up with a scheme to share the tax revenue amongst all the 16 states. Up to 2024, the S-H licenses which are currently active will be used.
Until the Definition and conditions
Virtual slot game products should not offer other forms of gambling like sports betting. Also, live casino games remain unpermitted unless a local state-owned land-based casino is involved in its operation. A clear difference between legal and illegal products is illustrated by the legislation.
The 1000-euro monthly default deposit limit which is mandatory remains in place across all virtual slot game operators. However, there is a default maximum gamble for a virtual machine of 1 euro which can be adjusted by the regulatory authority when they come up with required limits and approve the individual game.
Online poker remains illegal until 30th June 2021 while taxation on will take place at the operator’s country of residence on the corporate level. The filing of the license will have to be in German and a person from the country nominated as a contact in the application process.
All the operators are not allowed to advertise between 6 am-9 pm. The “free-to-play” virtual slot games adverts’ are illegal and won’t be offered a platform. The S-H licenses which are currently active can no longer be used to cover nationwide advertising.
- Will there be a further amendment of the gambling rules after the implementation of the ongoing third State Treaty amendment?
After June 2021, Schleswig-Holstein together with Germany gambling association intends to pave way for more amendments. One of the agendas to be discussed is allowing a casino license to be issued to other German states.
- What will happen to operators who will continue with illegal online gaming?
Once the gambling authorities prohibit the unlicensed wagering like sport betting across the country, Hesse will grant licenses to all operators willing to engage with online gambling. If caught with unlicensed gaming afterward, your license to operate will be revoked.
- When will the Schleswig-Holstein valid online gaming license expire?
After the expiry of the latest licenses in February 2019, the parliament voted for the revalidation on 16 May 2019. It allowed the former Schleswig-Holstein online casino operators to continue using the licenses from 28 June 2019 until 30 June 2021.