A new survey by University of Leipzig economist Gunther Schnabl has reported that only 50.7% of gambling was channelled to legal offerings in March 2023.
In comparison, 28.9% of German consumers bet with European operators without a local licence, and a further 19.9% with offshore businesses.
The study estimated that three-quarters of all generated gambling revenue was made on the black market, meaning hundreds of millions of euros lost in taxation.
The study was commissioned by the two prominent online gambling trade bodies in Germany: The German Online Casino Association (DOCV) and the German Sports Betting Association (DSWV).
Schnabl said that the results point to the German online gambling market being “heavily influenced” by unlicensed operators.
The continued size and strength of the German illegal segment since the July 2021 market regulation has led some commentators to argue that further liberalisation is needed.
In reaction to the study’s findings, the trade bodies issued a list of “urgent” measures required to rectify the situation.
These include a call for the legal market to be made more competitive. The industry has argued in the past that the current regime is too restrictive for many players, thus driving them to the black market.
The trade bodies said German gambling laws, the 2020 Interstate Gambling Treaty and the amended 2021 Racing Betting and Lotteries Act, should be evaluated to see if they are achieving their objectives.
Laws that have been subject to criticism in the past include a €1 per spin stake limit for online slots and €1,000 monthly maximum stake limits. The 5.3% stake tax has also been slated for being overly onerous.
The bodies also called for the GGL, the German online gambling regulator, to speed up the licensing process and improve cooperation with the industry.
Continued struggles against German black market
This is not the first time German industry has called for a solution to the country’s black market gambling problem.
The DSWV has repeatedly argued that a rethink of regulation is required.
In March 2023, the body raised the alarm, arguing that the GGL’s enforcement powers would not be sufficient to alone deal with the threat.
This came following a Higher Administrative Court of Rhineland-Palatinate court decision that challenged the regulator’s IP blocking capabilities.
The organisation also said that advertising bans had worked to only empower illegal actors, as opposed to supporting player protection.
