German Slot Players Increasingly Turning to Black Market
The channelization rate for online slots in Germany is estimated to be between 20% and 40%, according to recent figures published by Deutscher Online Casinoverband (DOCV), the trade association for online casinos in the country.
Person playing an online slot game. Experts warn of challenges to Germany’s gambling market.
LISTEN TO THIS ARTICLE:Speaking at the DOCV’s “beer, pretzels and policy” networking event during the ICE conference on January 21, Dirk Quermann, president of the organization, said that the latest figures were based on academic research.
On the sports betting front, Mathias Dahms, president of Deutscher Sportwettenverband (DSWV), the trade body for online betting in Germany, said that channelization for sports betting stood at a higher rate, between 60% and 70%.
Concerns Over Growing Black Market
Dahms raised concerns about the growing gambling black market in Germany and criticized the Gemeinsame Glücksspielbehörde der Länder (GGL), the national gambling regulator, for underestimating its scale.
We have an increasing black market problem in Germany. We are quite sure the [black market] estimates of the GGL are far too low. Up to now, we don’t see that the GGL is really recognising this black market problem we are all facing in our daily work.
The GGL’s 2023 annual report estimated that the black market accounted for about 4% of the overall German gambling market. This included revenues from online betting, online slots, and land-based gambling, with black market GGR ranging between €400 million and €600 million. In contrast, the legal market generated €13.7 billion in 2023, including €3 billion from online gambling.
However, the sector disputed these figures. The DOCV argued that comparing the size of the German black market to the total legal gambling market across all channels misrepresented the issue.
Speaking earlier this year, DOCV vice president Simon Priglinger-Simader explained, “You would have €400m to €600m in illegal online gambling and €3 billion of legal online gambling, which would be a 20% market share for the black market.”
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Market Struggling with High Taxation
The 5.3% turnover tax is another challenge for Germany's gambling industry, particularly for online slots and sports betting operators. Industry representatives say that taxing based on stakes rather than actual revenue creates an imbalance that makes certain products less appealing to consumers. This tax model has not only led to a decline in demand but has also made it increasingly challenging for operators to remain competitive and sustainable within the market.
Both the DOCV and DSWV have spoken of the urgent need to address this issue and warned that without a revised taxation framework, the industry risks losing both players and operators to unregulated markets.
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