The newly empowered German regulator the Gemeinsamen Glücksspielbehörde der Länder (GGL) has released an analysis of 2022 tax data, that shows that 95% bets are made with legal providers.
The regulator published the analysis in response to a press release issued by the sports betting trade association Deutsche Sportwettenverband (DSWV). In the statement, the lobbying organisation used its own figures to argue that the regulated market was much reduced in 2022 compared to the previous year, arguing that this was a result of the rise in popularity of unlicensed operators – itself a product of overly punitive regulation.
The regulator said that this conclusion “does not correspond” to its own findings.
“According to our market analysis, the channelling rate is well over 95%, which means that apart from less than 5%, the betting stakes are placed with the permitted sports betting providers according to the tax data of the Federal Ministry of Finance,“ said GGL CEO Ronald Benter.
While the GGL did not dispute the DSWV’s characterisation that the total size of the German sports betting market declined in 2022, falling 5% from 2021 and back to 2019 levels, this was not primarily the result of black market entities eating into the licensed market, providing its own analysis of the situation.
It argued that after the number of sporting events fell drastically from the Spring of 2020 onward, many competitions – such as the UEFA European Championship – were postponed until 2021. Subsequently, sales rose 16% in 2021, compared to a standard year.
The GGL further argue that the 2022 downturn was counter intuitively a result of the World Cup. A number of factors, including the very fact of the tournament taking place in Qatar, meant that the sporting event was not able to generate the enthusiasm that would be usual to the German audience. It is noted that many players adopted a generally critical attitude of the proceedings during the tournament.
The development of the illegal market
“We cannot find any crowding out of legal offerings by illegal offerings,” said board member Benjamin Schwanke. “The illegal websites mentioned by the DSWV are known to us and will be prosecuted under gambling law and, if necessary, passed on to public prosecutors, tax offices and the Central Office for Financial Transaction Investigations (FIU).”
In addition, there are stationary betting agencies that do not receive permission from the federal states, but are still active. It is the task of the federal states to take action against these unauthorized betting agencies.
Schwanke stated his view that the DSWV’s call for loosened restrictions and a rethink of regulation is a result of the strict rules on gambling legislated by the 2021 State Treaty on Gambling, which created the German national gaming market.
“This may give the subjective impression that the providers are restricted in their actions by these rules,” he said. “However, the numbers speak a different language. The regulation has no economic impact.”
The GGL also indicated that it is in talks with industry stakeholders on whether there should be any necessary adjustments to the legal framework. It said that any changes needed must be proven accordingly.
“The GGL is picking up speed in the fight against illegal gambling, including in the area of sports betting and related advertising. We will make success measurable on the basis of the data collected at GGL,” added Benter.
Earlier this week, the regulator urged licensed operators to betting cooperate with one another in order to improve the functioning of the country’s gambling market.
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