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THE GAMALYZE CHALLENGE

New Regulations Send German Online Gamblers Offshore

Germany’s sports betting association (the Deutsche Sportwettenverband or DSWV), has called upon the country’s government to speed up the sportsbook licensing process after the sector saw a fall of 16.1% in sales last year due to disruption caused by the coronavirus pandemic.

While this fall may not come as a surprise, the association’s president, Mathias Dahms, also warned that new regulations governing online casinos have caused a huge number of players to turn to unlicensed sites.

According to Dahms, in April and May 2020, the sports betting market “collapsed completely”, as betting shops were closed and sports were suspended. There was a small recovery in the late summer when sports resumed, but overall, revenues were significantly down for the year. Furthermore, as betting shops do not receive state aid, Dahms called upon the government to create a roadmap towards reopening.

While there is no doubt that the sports betting situation is serious, of more concern to regulators will be the movement of players to black market operators, mainly those that are based in Asia and the Caribbean.

According to operators that are members of the DSWV, they have seen iGaming turnover drop by an average of 54% since new regulations were brought in last October. The regulations mean that operators have to cap bets on online slots at €1 per spin and that spin speeds have to average 5 seconds.

Mathias Dahms DSWV President

It is clear that the strict regulations for virtual slot machines have channeled the market away almost overnight – unfortunately in the wrong direction. It is unrealistic to believe that German customers will get used to the excessive restrictions of the State Treaty and come back to licensed providers as long as they can play with competitors who offer them much better conditions.

Mathias DahmsDSWV President

As such, Dahms believes that the regulations need urgently updating and that there needs to be “functioning enforcement” against illegal operators. If that does not happen, he believes that regulated operators will withdraw from the German market.

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