The German regulator Gemeinsamen Glücksspielbehörde der Länder (GGL) recently released its annual report, providing a comprehensive review of its activities and an analysis of the gambling market. The findings are rather bleak.
Firstly, in 2023, revenues from illegal gambling accounted for up to 4% of the total gambling market in Germany. According to the regulator, the black market generated between €400 million and €600 million in GGR, which the GGL refers to as player losses, compared to the legal market’s total of €13.7 billion for the year.
Secondly, the GGL handled a total of 438 cases involving suspected illegal gambling or advertising of illegal gambling over the year. These sanctions targeted not only operators but also affiliates. Only 63 of these cases were “successfully” resolved, where affiliates or operators ceased their activities entirely. Criminal complaints were filed with the prosecutor's office, and the GGL stated that “numerous offers have already been stopped as a result of letters of advice from the GGL, particularly in the area of advertising for illegal offers. Those providers who do not discontinue their services despite prohibition orders are often based in countries outside the EU.”
More than 1,850 websites were checked, with the regulator initiating sanctionsin 133 cases. Of these, 87 were related to offering illegal gambling services, and notably, 46 were linked to advertising unlicensed operators through affiliates. It is uncommon for regulators to target affiliates, but Germany has detailed regulations on this matter. In March 2023, the Higher Administrative Court of Germany upheld the ban on affiliate marketing that simultaneously links to both illegal and legal gambling sites. This ruling endorsed GGL’s pursuit of marketing agencies and license holders who consciously advertise on websites that also promote illegal offerings.
Sanctions in Germany are strict, especially within the gambling industry. Payment blocking is a well-known punitive tool favored by the regulator, though it is not the only one. The GGL said 2023 enforcement action against the illegal market is “having an impact,” with payment blocking proving to be a “particularly effective enforcement tool” against illegal providers.
In addition to blocking payments, the regulator also revokes licenses from legal operators – including for the use of prohibited affiliates. For instance, in a notable case from March 2023, the GGL fined an unnamed operator a five-figure sum for deliberately advertising its services on a site that also contained links to illegal gambling. In the future, the regulator plans to implement a working scheme for IP address blocking for all sanctioned entities.
There is no doubt about the authority of the German regulator, but even this is not enough. According to the German Criminal Code, the GGL has the right to initiate criminal proceedings directly through prosecutors against any violators of industry regulations. The regulator actively exercises this authority and, at the beginning of 2024, proposed expanding its powers to include the criminal prosecution of foreign operators and providers. How this proposal would work in practice, if implemented, and the efforts required to locate offices and companies behind each offshore site, remain uncertain.
Despite facing constant challenges, the GGL notes that in 2023 it achieved significant improvements and laid the groundwork for future success. The latest activity report highlights substantial progress in regulating the German gambling market, including effective enforcement measures, growth in legal gambling revenues, and continued vigilance to ensure that players enjoy gambling in a safe environment.
However, many industry stakeholders criticize Germany's stringent regulations, noting that the market is highly unfriendly to operators. Furthermore, data published by the regulator on July 1 potentially overlooks a much larger black market issue. A study conducted by Leipzig University in November 2023 revealed that nearly 50% of players still gamble through offshore sites. Another study, commissioned by the German Sports Betting Association, showed that up to three-quarters of online revenues were generated offshore.
The German Sports Betting Association even describes the current regulatory framework as “the strictest in the world.” It is hard to disagree with this assessment - the approach to combating the offshore market is all stick and no carrot.
Firstly, in 2023, revenues from illegal gambling accounted for up to 4% of the total gambling market in Germany. According to the regulator, the black market generated between €400 million and €600 million in GGR, which the GGL refers to as player losses, compared to the legal market’s total of €13.7 billion for the year.
Secondly, the GGL handled a total of 438 cases involving suspected illegal gambling or advertising of illegal gambling over the year. These sanctions targeted not only operators but also affiliates. Only 63 of these cases were “successfully” resolved, where affiliates or operators ceased their activities entirely. Criminal complaints were filed with the prosecutor's office, and the GGL stated that “numerous offers have already been stopped as a result of letters of advice from the GGL, particularly in the area of advertising for illegal offers. Those providers who do not discontinue their services despite prohibition orders are often based in countries outside the EU.”
More than 1,850 websites were checked, with the regulator initiating sanctionsin 133 cases. Of these, 87 were related to offering illegal gambling services, and notably, 46 were linked to advertising unlicensed operators through affiliates. It is uncommon for regulators to target affiliates, but Germany has detailed regulations on this matter. In March 2023, the Higher Administrative Court of Germany upheld the ban on affiliate marketing that simultaneously links to both illegal and legal gambling sites. This ruling endorsed GGL’s pursuit of marketing agencies and license holders who consciously advertise on websites that also promote illegal offerings.
Sanctions in Germany are strict, especially within the gambling industry. Payment blocking is a well-known punitive tool favored by the regulator, though it is not the only one. The GGL said 2023 enforcement action against the illegal market is “having an impact,” with payment blocking proving to be a “particularly effective enforcement tool” against illegal providers.
In addition to blocking payments, the regulator also revokes licenses from legal operators – including for the use of prohibited affiliates. For instance, in a notable case from March 2023, the GGL fined an unnamed operator a five-figure sum for deliberately advertising its services on a site that also contained links to illegal gambling. In the future, the regulator plans to implement a working scheme for IP address blocking for all sanctioned entities.
There is no doubt about the authority of the German regulator, but even this is not enough. According to the German Criminal Code, the GGL has the right to initiate criminal proceedings directly through prosecutors against any violators of industry regulations. The regulator actively exercises this authority and, at the beginning of 2024, proposed expanding its powers to include the criminal prosecution of foreign operators and providers. How this proposal would work in practice, if implemented, and the efforts required to locate offices and companies behind each offshore site, remain uncertain.
Despite facing constant challenges, the GGL notes that in 2023 it achieved significant improvements and laid the groundwork for future success. The latest activity report highlights substantial progress in regulating the German gambling market, including effective enforcement measures, growth in legal gambling revenues, and continued vigilance to ensure that players enjoy gambling in a safe environment.
However, many industry stakeholders criticize Germany's stringent regulations, noting that the market is highly unfriendly to operators. Furthermore, data published by the regulator on July 1 potentially overlooks a much larger black market issue. A study conducted by Leipzig University in November 2023 revealed that nearly 50% of players still gamble through offshore sites. Another study, commissioned by the German Sports Betting Association, showed that up to three-quarters of online revenues were generated offshore.
The German Sports Betting Association even describes the current regulatory framework as “the strictest in the world.” It is hard to disagree with this assessment - the approach to combating the offshore market is all stick and no carrot.
