On the last day of the ICE 2025 trade fair in Barcelona, the German Online Casino Association touched on a pretty hot potato: During a closing networking event, they explained that the use of licensed online gaming machines in Germany would actually only rank between 20 and 40 percent, massively off the official estimates of the gambling supervisory authority. More fuel for the ongoing controversy surrounding the strength of the black market in the country.

What would we actually do without the never-ending discussion about the regulation of the German gambling market? Joking aside. But since the State Treaty on Gambling (GlüStV) came into force in 2021, it feels like there hasn't been a month without new disagreements about the black market and the effectiveness of the new laws.

  • Are the 5-second rule, the gambling tax that reduces the chances of winning, the gaming restrictions and the autoplay ban really necessary?
  • Or are they more likely to block the development of the legal market and even drive more and more people into the hands of illegal providers, who allow more freedom but are all the more dangerous? At the beginning of 2024, we asked ourselves what the individual reasons are for players becoming active in online casinos without a license without a license.
While the majority of politicians continue to support the line taken by the Joint Gaming Authority of the German federal states (GGL), many players, as well as academics, independent experts and, above all, the industry are critical of the whole thing and are calling for more flexibility. Although the GGL itself acknowledges deficits - most recently in the overall positive annual review 2024 - but really noticeable changes? So far, no sign.

Last week, however, the debate was once again fed with water: on January 21, 2025, the last day of the ICE trade fair in Barcelona, the most important industry show for gaming companies, the German Online Casino Association (DOCV) hosted a networking event entitled "Beer, Pretzels and Policy". In this relaxed atmosphere, President Dirk Quermann dropped another bombshell:

  • He said that he had scientifically substantiated data showing that the channeling of online slots in Germany was only between 20 and 40 percent - well below the estimates of the GGL and politicians.
  • The German Sports Betting Association (DSWV) also joined in with critical figures and showed that the problems of recent years will continue to smoulder in 2025.

A potentially sensitive point: just a few days ago, the Federal Statistical Office published information according to which tax revenue from online machines has fallen by a whopping 38 percent. However, it is highly questionable whether people are simply gambling less or prefer to switch to the black market.

Let's take a closer look at what exactly happened at ICE!

DOCV figures alert: German gambling regulation in the crossfire again

The figures that the DOCV pulled out of the bag at the ICE last week are, to put it mildly, explosive:

According to scientifically proven estimates, the channeling of online slots in Germany is currently said to be somewhere between 20 and 40 percent.

The DOCV naturally wanted to force the following conclusion on those present: The majority of players are migrating to unlicensed providers. An announcement that once again scratches the surface of the GlüStV's ambitious plans.

Incidentally, there were already considerable doubts at the end of 2023 that the reality did not quite match the original targets. At that time, we also reported on a study by the University of Leipzig, according to which the GlüStV 2021 channelization plan would clearly be missed. Since then, one debate has followed the next: most recently at the end of 2024, when the industry complained about the "standstill" in the German gambling market.

Mathias Dahms, President of the German Sports Betting Association, also spoke about the state of online betting in the country during the ICE event. According to the report, there are currently 29 licensed providers who were able to record total gaming revenue of 7.3 billion euros in 2024 - including gross gaming revenue of 1.1 billion euros.

Sounds like growth? Yes, because bets increased by 4 percent compared to 2023. But the devil is in the detail: according to Dahms, investments have slumped by a whopping 15 percent overall since the introduction of the 5.3 percent betting tax in 2021.

Black market in the shadows: is the GGL doing too little?

There are apparently fundamental differences of opinion between the GGL and the industry as to how big the black market problem actually is.

  • Following the DOCV's current assessment of slot canalization at the ICE, figures from last summer were presented in the international trade press, according to which the authority estimated the size of the illegal market in Germany at around 4 percent - with a gross value added of 400 to 600 million euros.
  • The legal market is said to be around 13.7 billion euros, with the online segment accounting for 3 billion euros.
  • Compared to the figures for the black market, the situation does not appear dramatic at first glance. However, industry representatives take a much more critical view.
Simon Priglinger-Simader, Vice President of the DOCV and regulatory consultant at Entain, already made it clear to the trade press last year: "There would be 400 to 600 million euros in illegal online gambling and 3 billion euros in legal online gambling, which would correspond to a market share of 20 percent for the black market." And that is of course no small matter.

Incidentally, the far-reaching revelations of the "Casino Papers" could make many illegal providers on the German market vulnerable.

"We have an increasing black market problem in Germany," Mathias Dahms explained in no uncertain terms at the ICE. "We are pretty sure that the GGL's estimates are far too low. So far, we don't see the GGL really accepting this black market problem that we all face in our daily work."

Dahms put it in a nutshell to those present at the ICE networking session:

"GGL has failed to recognize the extent of the black market and the problem it causes for the sector on the ground."

Getting there together? Why collaboration is "vital"

Criticism or not, one thing was also made clear at the ICE: Without closer cooperation between the industry, regulators and politicians, the German gaming market will run into (increasingly) serious difficulties. Both Mathias Dahms from DSWV and Dirk Quermann from DOCV made this clear in their speeches.

"It's really difficult to survive [in the German gaming market], to be honest," Quermann stated bluntly. His appeal: "If we don't come to a [new] solution together - the industry, the GGL and the politicians - I don't think it's a viable market at the moment."

The current tax model in particular, which has caused some confusion in the past, was the focus of the discussion. The reason: gambling tax in Germany is calculated on the basis of bets - a system that, according to Quermann, is simply unsuitable for slot machines.

"This in turn leads to a product that is not in demand by players," he noted.
The result: a decline in revenue from gambling tax and even less attractiveness of the regulated market.

Dahms took up the idea and emphasized how crucial it was to deepen the dialogue with political decision-makers and the GGL.

"We need to intensify our discussions with politicians and with the authority about these problems that we have already described. Otherwise, customers will continue to leave the regulated market and operators will also withdraw from the market," he warned.
Despite all the challenges and vocal criticism, the industry remains optimistic that a solution is possible - provided that all parties involved pull together. The importance of a cooperative approach could also be heard in Mathias Dahms' concluding words: "Cooperation is the key. Only together can we create a market that is attractive for both players and operators."

Source of the image: Screenshot from https://igamingbusiness.com/legal-compliance/germany-online-slots-channelisation/

Central text source: https://igamingbusiness.com/legal-compliance/germany-online-slots-channelisation/

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