An Overview of Germany’s Evolving iGaming Market

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Soccer player celebrating with iGaming elements for overview of the iGaming market in Germany

Germany, a much sought-after iGaming market, has attracted a lot of attention from operators and affiliates over the years in anticipation of news from lawmakers deliberating the future of the iGaming space. Fast-forward to today, where Germany is a regulated market under the close watch of the regulatory body - Gemeinsame Glücksspielbehörde der Länder (GGL) to oversee and enforce the rules put in place for all newly licensed operators. While there are now locally licensed German operators, there still remains the presence of black market operators (who actively operate in the German market without an authorized license). The continued presence of these black market brands means that local licensed brands are competing with brands not following the same constraints to capture market share.

This brings us to today, where players are left to make a decision on where to play, weighing the pros and cons of regulated and black market brands and looking to affiliate’s for guidance on where to find the best experience available. With that in mind, our latest blog post breaks down the German iGaming market, looking at regulations, the effect of affiliate marketing and how this has changed things for players.

Impact of Treaty on German Operators

The Interstate Treaty on Gambling, also known as Glücksspielstaatsvertrag, came into effect in July 2021. This treaty, which regulates online gambling, brought about strict regulations for operators in the market. While its main goals were to fight against illegal gambling and protect players, it has since led to a number of challenges and opportunities.

With the adoption of the treaty, operators are now required to obtain licenses in order to offer online casino games, poker, or sports betting. The licenses are valid for five years and require operators to adhere to strict responsible gaming protocols. These include spin delays for online slots, deposit limits of €1,000 per month, limited number of games offered, and the ban of live betting, live casino, and progressive jackpots.

Moreover, these restrictive measures also impact overall advertising for German operators. Some examples of the limitations include not broadcasting ads between 6 AM and 9 PM, not targeting ads to minors or vulnerable groups and prohibiting the use of influencer marketing. Furthermore, operators are also subject to a 5.3% taxation on amounts staked for sports betting, which reduces overall profitability.

While these regulatory changes can be difficult for operators, the legalization ultimately allows licensed operators to differentiate themselves as trustworthy and reputable brands who support and ensure player safety.

Affiliate Marketing Impact

An important aspect that impacts all players involved is how the GGL is handling online advertising regulations. A key ruling being that the GGL is enforcing penalties against brands who promote themselves on affiliate sites that also features black market operators. Going as far to say that several repeated offenses can even result in the removal of a brand’s German license altogether. In June 2023, the GGL shared that over 2,000 affiliate sites were reviewed and contacted operators breaching this rule, even handing out their first ever fine to an operator. It is estimated by the GGL that black market operators account for between 300-500 million euros, approximately 2-4% of the German gambling market This puts great importance and pressure for operators to closely monitor the sources their affiliate partners are promoting them on to avoid fines, by using compliance tools like Rightlander

This also poses challenges for affiliates, as they may need to reconsider their approach to promoting licensed German brands, while still keeping in mind the demand from German customers to play on black market gaming sites. Certain sports betting promo offers, games and events, such as esports are not permitted to be offered by licensed operators, meaning a player interested in betting on such an event would need to create an account on a black market operators site, which gives an advantage to the black market to cater to all of the German consumers needs and entices affiliates to continue promoting their offerings

Player Impact

With these new advances in the iGaming market, players are also impacted. For experienced players, having these new game limitations has caused frustration and pain points in their gaming experience, as it is a learning curve for all. In fact, reports have shown that some players are migrating from legal operators to the black market.

Last year, legal sportsbooks in Germany stated that they experienced a decline of 5.4% in total bets compared to 2022. As players navigate this new landscape, they also stand to benefit from increased responsible gaming, fair play and overall protection that they did not have prior to legalization. 

The future of iGaming in Germany

Despite some of the obstacles faced by the Treaty, Germany’s market will continue to evolve and present opportunities for both operators and players. Much of the operators and affiliates’ success will depend on their ability to balance the regulatory changes while remaining focused on adequately serving the needs and safety of German players. They will also need to communicate and keep each other informed to ensure they can navigate the ever-changing German regulations together.