Over 95% of The Sports Betting Market Comprises Legal Betting Operations.
Published March 28, 2023 by Brett C
A newly released analysis of 2022 tax data from the German regulator Der Gemeinsamen Glücksspielbehörde der Länder (GGL) has revealed that 95%+ of bets were made with legal operators. This analysis was published in response to a press release by the sports betting trade association Deutsche Sportwettenverband (DSWV).
The statement from the lobbying organization used its numbers to suggest that the regulated market had been significantly reduced during 2022 compared to the year before, claiming that this was a result of the increased popularity of unlicensed, illegally operating betting platforms, due in large part to overly punishing regulations.
The regulator commented that their research showed that the proportion of bets placed with legal betting providers was much higher than the 95% suggested by the DSWV's press release and that the decline in market size was more likely due to the general reduction in consumer demand.
GGL CEO Ronald Benter stated that their tax data analysis had indicated a "channelling rate" of over 95%, meaning that almost all betting stakes were placed with fully licensed and regulated sports betting providers.
The regulator indicated that the decrease in the German sports betting market in 2022 resulted from reduced consumer demand due to the lack of engagement from the FIFA World Cup in Qatar.
The GGL stated that sales increased 16% throughout 2021 vis-a-vis a standard year, primarily due to the postponement of the UEFA European Championship until 2021. They further hypothesized that the 2022 downturn was counterintuitively caused by the FIFA World Cup and a generally critical attitude among a German betting audience, resulting in a lack of enthusiasm for the proceedings.
Growth In Illegal Gambling Activity
The illegal gambling market is continuing to grow at an alarming rate, despite efforts from law enforcement and government officials to combat it. In a recent statement, Benjamin Schwanke, a member of the German Sports Betting Board (DSWV), revealed no evidence that illegal online betting websites are driving away customers from legal offerings.
However, Schwanke warned that unauthorized betting agencies operating stationary are still active in the country. To combat the illegal gambling market, the DSWV has called on the federal states to act against unauthorized betting agencies. The organization has also asked the German Central Office for Financial Transaction Investigations (FIU) to prosecute those involved and hand them over to the appropriate authorities, such as the public prosecutors and tax offices.
Despite the rigorous regulations, the grey-market gambling arena thrives, raising the alarm among the government and law enforcement. Benjamin Schwanke, a board member of the German Sports Betting Board (DSWV), revealed no evidence to suggest that illegal online betting websites are driving away customers from legal offerings.
To combat the illegal market, the DSWV has called on the federal states to act against unauthorized betting agencies, as well as for prosecution of those involved by the Central Office for Financial Transaction Investigations (FIU). The continued growth of the illegal gambling market has prompted a call from the DSWV for loosened restrictions and a rethink of regulation.
GGL Ready to Ramp Up Efforts to Stabilize Nascent Industry
GGL has also stated that they are in talks with industry stakeholders on whether there should be any necessary modifications to the legal framework, with any changes needing to be proven accordingly. In the meantime, DSWV and law enforcement are working to clamp down on the illegal market and ensure those involved are brought to justice.
The GGL is ramping up its efforts to tackle the illegal gambling market, especially in sports betting and advertising. To ensure progress, the regulator collects data to measure success.
In addition, Ronald Benter also called on licensed operators to work together to strengthen the country's gambling market. The DSWV is doing its part to combat the illegal gambling market by urging the federal states to act against unauthorized betting agencies.
It has also asked the German Central Office for Financial Transaction Investigations (FIU) to prosecute those involved and hand them over to the appropriate authorities, such as the public prosecutors and tax offices.
The alarming growth of the illegal gambling market has caused significant concern among the government and law enforcement, prompting the GGL to rethink its laws and regulations. The regulator is currently in talks with industry stakeholders to bolster the legal foundation of Germany's gambling arena.
