The German gambling regulator, GGL, has expressed confidence in its capacity to crack down on black market operators.
The regulator presented its inaugural annual report yesterday (29 June) and revealed it has identified more than 200 unlicensed operators targeting German players.
More than 60% of those are operating out of Curaçao.
To provide players with a clear distinction between regulated and offshore gambling websites, the authority unveiled a new “verification and permit seal” that operators will be required to display on their websites from 1 July 2023.
Co-CEO Ronald Benter (pictured) said the new seal would ensure “more transparency”, while his colleague Benjamin Schwanke emphasised the absence of the seal would indicate an illegal offering.
The GGL currently maintains a whitelist consisting of 142 providers offering online slot games, online poker, sports and horse betting, as well as various lotteries.
Additionally, 45 applications remain pending and are being reviewed at the moment.
The GGL also disclosed that it is dealing with more than 100 ongoing court cases related to German Interstate Treaty provisions and permits issued by the regulator.
Last week, iGaming NEXT reported that the GGL acknowledged the presence of a significant number of lawsuits, primarily focusing on advertising and player protection regulations filed by operators.
Nevertheless, the regulator emphasised that recent rulings have bolstered the existing player protection measures, including the GGL’s strict stance on affiliate marketing.
“We look back on a successful first half of 2023. We will continue on the path of consistent enforcement of regulations in permit issuance and supervision,” Benter said.
“Initial court decisions confirm our approach. At the same time, we remain in dialogue with the industry regarding new challenges,” he added.
The GGL also shared market figures. Previously published statistics covering sports betting handle sparked a debate between the German Sports Betting Association and the regulator.
According to the GGL, Germany’s regulated gambling market generated GGR of approximately €13.4bn in 2022.
This figure includes revenue from operators already on the whitelist, as well as €0.8bn attributed to companies that were awaiting their licence approval at that time.
The figures are based on reports submitted by operators to the relevant regulatory authorities, as well as the tax statistics from the tax authorities.
Online gambling accounted for 19% of the total, while GGL-regulated operators generated GGR of €3.5bn, roughly a quarter of the total €13.4bn. The remainder came from the land-based sector.
Of this, sports betting accounted for the largest portion, amounting to €1.4bn.
The black market
The German regulator had identified 207 unlicensed operators in the country offering gambling services through 843 German language websites at the end of 2022.
Of these operators, 136 offer multiple forms of gambling, while the remaining 71 specialise in just one activity.
According to the GGL, 37 work from within the EU and 147 are based outside.
With 132 operators, Curaçao licensees represent the majority of non-EU organisations.
However, 23 operators could not be traced to any country.
The GGL said that it estimates that unregulated operators account for a “market volume between €300m and €500m, primarily generated from illegal secondary lotteries, online casino games, virtual slot games, and sports betting”.
This corresponds to approximately 2% to 4% of the regulated market.
Mixed results, meanwhile, have been observed in the enforcement efforts of the GGL.
The GGL revealed that to date it has conducted checks on over 2,000 websites to identify instances of illegal gambling and illegal advertising.
Until the end of 2022, the GGL reviewed 1,150 sites, leading to over 157 proceedings for illegal gambling and 157 proceedings for illegal advertising.
In the area of payment blocking, the GGL has found that many payment service providers, especially banks, actively cooperate in implementing the prohibition. Typically, these providers respond promptly during hearings and block payments to unlicensed operators, the regulator stated.
On the other hand, the GGL has initiated six IP blocking proceedings against prominent internet providers.
However, the regulator acknowledged that the legal basis for this measure has faced some critical views from courts.
Furthermore, the GGL has revealed that Jorg Sibbel, the current chair, will be succeeded by Udo Götze, the state secretary in the Thuringian Ministry of the Interior and Municipal Affairs, starting from 1 July.
This transition aligns with the regulatory requirements in Germany, where the leadership of the organisation changes annually on the 1 July.
Each chairman is selected by a German state, following an alphabetical rotation.
However, iGaming NEXT has received information indicating that additional leadership changes are forthcoming, including within the GGL’s licensing department, while co-CEO Schwanke’s contract is also coming to an end.
This has raised concerns in industry circles that it may lead to a temporary slowdown in the GGL’s licensing operations.
When contacted by iGaming NEXT for comment, the GGL said it generally does not comment on personal changes.
The GGL stated in its annual report that it aims to process all outstanding applications by the end of 2023 to establish an attractive legal gambling market.
Co-CEO Schwanke concluded that the authority is “confident in successfully curbing the illegal gambling market”.
He said: “No challenge is too small for us, and we are not intimidated by major players. We have established the necessary structures and processes and can build upon the work and expertise of the authorities previously involved.”