Speaking during the DOCV’s ‘beer, pretzels and policy’ networking event during last week’s ICE conference (21 January), Dirk Quermann, president of the online slots and casino group in Germany, told attendees this data was based on estimates from academics.
On the sports betting side, Mathias Dahms, president of the online betting trade body in Germany (DSWV) spoke alongside Quermann. He said channelisation for the vertical was around 60% to 70%.
According to the DSWV, there are approximately 29 online betting licence holders in Germany which collected a total of €7.3 billion (£6.1 billion/$7.7 billion) in stakes in 2024, with an estimated gross gaming revenue (GGR) of €1.1 billion.
This represents a 4% rise in stakes from 2023. However, stakes overall have dropped 15% since the 5.3% turnover tax was introduced in 2021.
“GGL black market estimates are too low”
Dahms said the body believes Germany’s betting regulator, the Gemeinsame Glücksspielbehörde der Länder (GGL), has not recognised the scale of the black market and the problem it is causing for the sector locally.
“We have an increasing black market problem in Germany,” Dahms told attendees. “We are quite sure the [black market] estimates of the GGL are far too low. Up to now, we don’t see that the GGL is really recognising this black market problem we are all facing in our daily work.”
The GGL reported back in July it estimated the total gambling black market made up around 4% of the overall German market in its 2023 annual report. But this included online betting, online slots and land-based revenues in Germany.
At the time it said the black market recorded between €400 million and €600 million in GGR during the period, compared to the legal market’s €13.7 billion total for the year. Of this sum, the GGL said, €3 billion was generated online.
The sector hit back at this forecast, insisting it did not represent an accurate depiction of the market. The DOCV told iGB the data misrepresented the true size of the black market, especially by comparing it to the entire market across all channels.
“You would have €400m to €600m in illegal online gambling and €3 billion of legal online gambling, which would be a 20% market share for the black market,” DOCV vice-president and Entain regulatory affairs counsel Simon Priglinger-Simader told iGB in July.
Speaking during their ICE session, both associations agreed they were confident in their work with the GGL. “I’m quite confident that someday, to some extent, we will come to a common understanding and then come to the right conclusion from that,” Dahms said of the bodies’ collaboration with the regulator.
Turnover tax making market “unviable” in Germany
Dahms and Quermann also discussed the challenges online slots and sports operators are facing in regards to the turnover tax, which has resulted in an overall drop in gambling tax revenues.
“We are paying on the basis of stakes, which for slot games or virtual slot games, is not the right basis to tax these products and this again leads to a product which is not in the demand of players,” noted Quermann.
“It’s really hard to survive [in the Germany gambling market] to be honest. And if we do not come to [a new] conclusion together, the sector, the GGL and the politicians, I think it’s not a viable market at the moment.”
Mathias told attendees the online slots and betting sector must intensify its talks with policy makers and regulators to solve these problems.
“We have to intensify our talks with politicians and with the authority on these problems we’ve already described. Otherwise customers will continue to leave the regulated market and also the operators will withdraw themselves from the market,” he warned.
Original article: https://igamingbusiness.com/legal-compliance/germany-online-slots-channelisation/
