German Regulator Denies Tight Rules Foster Black Market

March 16, 2023
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The German regulator has challenged a trade group’s assertion that the country’s restrictive online gambling rules are fueling a black market.

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The German regulator has challenged a trade group’s assertion that the country’s restrictive online gambling rules are fueling a black market.

Channeling of online sports betting to licensed operators is at more than 95 percent, according to the Joint Gaming Authority of the Federal States (GGL), citing Federal Ministry of Finance data.

“The GGL is picking up speed in the fight against illegal gambling, including in the area of ​​sports betting and related advertising,” said board member Ronald Benter.

“We will make success measurable on the basis of the data collected at GGL,” he said.

The statements on Wednesday (March 15) respond to claims by the German Sports Betting Association (DSWV) last week that the black market is booming, citing data which showed that sports-betting stakes declined almost 13 percent in 2022 over the previous year to €8.2bn.

Tax revenue dropped a similar amount to €433m, the group said.

The GGL’s estimate includes data from licensed operators, but does not take into account the hundreds of gambling websites illegally pitching German consumers, said DSWV chief executive Luka Andric.

In February, the gambling trade group found 840 unlicensed websites accessible to German players, 723 of which allowed registration.

It also found land-based betting shops operating “with impunity” despite having been turned down for a licence by local authorities, Andric said.

“The legal market has to hold its own against the countless black market providers who do not adhere to any specifications or rules,” DSWV president Mathias Dahms said last week.

The industry has complained about the high taxes and restrictions on allowable bets handicapping licensees against illegal operators.

Operators that obey the law are losing business to those offering more-comprehensive choices, better odds, simpler payment processes and more-appealing bonuses, Dahms said.

The GGL also responded to the betting trade group’s call for the regulator to move away from attempts to block illegal websites, after two attempts at IP blocking have failed in court.

A number of unlicensed operators have withdrawn their offers on request from the regulator, and payments companies have cooperated with requests to limit payment options, the regulator said.

The legal measures have only been stymied in initial hearings and full cases have yet to be heard, the GGL said.

“We remain optimistic that the instrument of network blocking will ultimately be upheld in court as a last resort in the fight against illegal online gambling,” said Benter.

Separately, the authority said it had experienced “insufficient cooperation” on slots licensing.

Although the majority of applicants have been approved so far, operators have been slow in paying security deposits, and there have been “defects” in applications for individual games, Benter said.

“This delays the permitting process and prevents faster channeling from the illegal to the legal market,” he said.

The authority listed 20 licence approvals as of February 28.

Gambling industry officials have complained that the interstate treaty enabling online gambling laws requires each slots game to be approved individually for each licensee, a cumbersome process that they say hinders operators’ ability to compete with the black market.

The GGL was recapping statements on Wednesday that it made at a University of Hohenheim gambling symposium.

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