The gambling industry has experienced a boom in the last few years. With the appearance of new companies, competition has appeared. Most markets have introduced specific acts regulating this form of entertainment.
However, this did not prevent the growth of the black market, which caused many problems in various jurisdictions, including Germany.
Germany's authorized gambling operators face mounting challenges from the thriving black market. This article explores the impact of regulatory measures and their unintended consequences on the German gambling industry.
Wes Himes of the Betting and Gaming Council underlines that a competitive controlled market is the most effective countermeasure to the black market. While the German Gambling Act is glorified for its cooperative approach, slow headway in regulatory reform in Great Britain stands in stark contrast.
Great Britain's guideline of moderating instead of forbidding activity, with affordability examinations and personalized settlement, appeals to many. Critics view blanket restrictions like monthly deposit caps of €1,000 as intrusive and excessive, driving players to the unregulated black market.
Sam Brown, CEO of Rootz, underlines the effects of re-regulation in Germany. As restrictions tightened, average punters' warranties plummeted by 80%, and gross earnings per player halved. Brown reveals a substantial evolution of players from controlled to unregulated markets.
Himes and Brown agree that harm deterrence should be the ultimate responsibility of operators. Addicted customers are damaging to business, and a personalized, player-centric approach can be more effective than blanket restrictions.
Yannick Skulsky of Hambach & Hambach notes the sophistication faced by legal operators in rolling out new titles due to rigid credential needs. The lack of B2B licensing forms contrasts between licensed and unlicensed operators.
Attempts by players to recover gambling losses from unapproved brands have not discouraged the black market's growth. While courts and customers continue to seek settlement, a recent Supreme Court ruling may shift the landscape. This ruling stresses that players are knowingly engaged in illegal gambling.
Illegal play extends across all pipelines, from unlicensed gaming machines to Kaffe Kasinos. Criminal groups find illegal gambling low-hazard and highly worthwhile. Efforts are being made at the country level to combat both illegal gambling and strict regulations on the regulated market.
Germany's licensed gambling operators face a complex challenge in combating the black market while adhering to stringent regulations. The unintended consequences of blanket restrictions and a lack of personalized compromise may be driving players towards unregulated alternatives. Achieving the right balance between regulatory control and market competitiveness remains an ongoing debate in the German gambling industry.
Source:
''Germany’s illegal gambling problem'', igamingbusiness.com, October 9, 2023