DSWV blames rampant black market and strict regulations for difficulties in Germany
Trade body highlights operators offering services without a licence as the root cause of 13% dip in total stakes in 2022
The German Sports Betting Association (DSWV) has blamed the combination of the over saturation of illegal operators and overly strict regulation in the German market as the root cause of a decline in the total amount staked in the regulated market.
Releasing data ahead of its annual press conference, the DSWV reported that despite it being a World Cup year, the amount staked in 2022 fell 13% year on year (YoY) to €8.2bn (£7.3bn).
The trade body also reported that state revenue from sports betting tax fell to €433m.
The DSWV attributed this decline to the “extremely restrictive German regulation” and a “rampant black market”.
The body argued that legal providers can only operate within a very narrow regulatory framework and cannot offer sufficiently attractive products to players to successfully compete with the black market .
The DSWV further argued that the German legal gambling market is one of the most restrictive markets in Europe, and that the black market is growing at an unprecedented rate alongside it.
In February, the DSWV conducted a study into black-market activity and found that 65% of players are actively playing in the black market.
Out of a total of 1,500 sites operating without a German licence that were investigated, the DSWV discovered that German players could access 840 sites and open an account on 723 of them.
For comparison, there are only 46 licenced providers in Germany, with 31 of those being sports betting providers.
Mathias Dahm, president of the DSWV, said: “Unfortunately, in 2022, exactly the scenario we have warned about time and again has come to pass. The legal market has to hold its own against the countless black-market providers who do not adhere to any specifications or rules.
“For most customers, whether a provider has a permit from Germany is secondary. They are looking for the most comprehensive offer, the best odds, uncomplicated payment processes and interesting bonuses. That’s where the legal offers have a hard time.”
The DSWV also highlighted the relative ineffectiveness of the German regulator’s efforts to clampdown on black-market activity.
The group said that Gemeinsame Glücksspielbehörde der Länder’s (GGL) orders to block websites via internet services providers had been “curbed” after three separate court rulings denied the orders.
This has led the DSWV to encourage the regulator to pursue other methods of fighting illegal operators.
The trade body also argued that the overly strict advertising restrictions in Germany has encouraged the proliferation of the black market, which in turn has had a detrimental effect on player protection.
Luke Andric, CEO of the DSWV, commented: “Advertising serves to steer all those who are already interested in sports betting into the state-supervised, and thus safe, market. In order to obtain a sports betting licence in Germany, providers must meet numerous player protection criteria.
“The illegal providers from third countries do not care about the German regulations. Many advertise even on the internet purposefully, thereby to let blocked players play. This type of advertising must be urgently prevented, and the advertising possibilities of legal providers must be strengthened.”