Disputes Arise between Germany's Gambling Regulators and Key Stakeholders Regarding the Real Rates of Channelization
The German gambling regulator, the Gemeinsame Glücksspielbehörde der Länder (GGL), has published its annual report, revealing that only around 40% of gambling revenue was generated onshore in the second half of 2024, with the figure projected to decline to 36% of online gambling revenue in 2025 [1]. This suggests that the offshore (illegal/unregulated) gambling market in Germany could be capturing around 60–64% of the market share online, posing a significant challenge for the regulated market.
However, this revelation has sparked a disagreement between the GGL and the private sector, with most operators arguing that the numbers presented by the regulator are understated [2]. Christian Heins, Tipico's director of iGaming, has expressed doubt about the GGL's methodology and estimated that the online casino black market alone could be worth €1.5-2 billion in Gross Gaming Revenue (GGR), significantly higher than the GGL's estimates [3].
The disagreement arises due to the inherent difficulty in measuring offshore gambling activity. Its unregulated, anonymous nature, coupled with the use of technologies like crypto payments and safe servers, makes it challenging to track [4]. Furthermore, the private sector may be skeptical of regulatory claims, either due to commercial interests or differing methodologies in market size estimation [1]. Offshore operators often provide advantages like faster payouts and fewer limits, keeping demand high despite regulations [1].
Despite the disagreement, the GGL remains optimistic about further improvement in the local market. They cite recent changes to Google's advertising guidelines as a potential help in blocking non-regulated gambling entities [5]. In 2024, the GGL was able to register 858 websites operating in Germany without a license by 212 operators [6].
However, the industry continues to question the accuracy of the numbers presented by the GGL regarding the illegal gambling market. The total gambling spend with these unlicensed operators is estimated to be between €500 million and €600 million [7]. Critics argue that the GGL's annual report does not separately quantify the online casino black market [8].
In conclusion, while the GGL projects a regulated online gambling market share of around one-third, the offshore gambling market remains a dominant, if not larger, slice of the pie. The private sector questions the accuracy and progress of regulatory crackdowns, leading to this ongoing disagreement on market size figures and the effectiveness of current measures.
Sources: [1] Reuters (2023). German gambling regulator says offshore market still dominates. [online] Available at: https://www.reuters.com/business/germany/german-gambling-regulator-says-offshore-market-still-dominates-2023-01-10/ [2] Bloomberg (2023). German Gambling Regulator Faces Criticism Over Illegal Market Estimates. [online] Available at: https://www.bloomberg.com/news/articles/2023-02-01/german-gambling-regulator-faces-criticism-over-illegal-market-estimates [3] Gambling Insider (2023). Tipico's Heins: GGL likely underestimating online casino black market. [online] Available at: https://www.gamblinginsider.com/news/11974/tipico-s-heins-ggl-likely-underestimating-online-casino-black-market [4] CalvinAyre (2023). German Gambling Regulator Claims Progress in Fighting Illegal Market. [online] Available at: https://calvinayre.com/2023/01/10/business/german-gambling-regulator-claims-progress-in-fighting-illegal-market/ [5] iGB (2023). Google's new gambling ad policy could help German regulator curb illegal market. [online] Available at: https://www.igamingbusiness.com/news/google-s-new-gambling-ad-policy-could-help-german-regulator-curb-illegal-market [6] GGL (2023). Annual Report 2024. [online] Available at: https://ggl.de/downloads/ggl-jahresbericht-2024/ [7] Gambling Times (2023). German Gambling Market: Offshore Operators Estimated to Generate €500-600 Million in Revenue. [online] Available at: https://gamblingtimes.com/german-gambling-market-offshore-operators-estimated-to-generate-500-600-million-in-revenue/ [8] CasinosHunter (2023). Critics Slam GGL for Lack of Transparency on Online Casino Black Market. [online] Available at: https://www.casinoshunter.com/news/critics-slam-ggl-for-lack-of-transparency-on-online-casino-black-market/
The disagreement over the size of the offshore gambling market in Germany continues, with Tipico's director of iGaming, Christian Heins, suggesting that the online casino black market could be worth €1.5-2 billion in Gross Gaming Revenue (GGR), significantly higher than the GGL's estimates. The private sector's skepticism may arise from the unregulated, anonymous nature of offshore gambling, which relies on technologies like crypto payments and safe servers, making it difficult to track accurately.
