Berlin-based Goldmedia Group, which provides national and international clients with high-quality consulting and research services in the fields of media, entertainment, and telecommunications, has published its latest study on the German gambling market. ‘Betting and Gambling Market Germany 2015’ shows that the government’s restrictive gaming reforms have produced declining revenues and greater use of foreign online gambling services.

When Germany's State Treaty on Gambling was approved in 2008 with the aim of reducing gambling addiction, online gambling through private providers was prohibited and advertising of gambling services banned. The gross gaming revenue in Germany for 2009 amounted to €10.3 billion, including both the regulated market and unregulated segments (all private services, either having an unclear legal status or being completely forbidden). In 2009, the share of the unregulated market was one-fifth and if current trends persist, the share will reach almost a third by 2015.

The present State Treaty mandates that most forms of gambling be done through state-owned monopolies. The World Cup is currently the top source of online sports betting, and many football fans and gamblers across Germany are placing their bets with private online companies registered outside the country. Goldmedia believes that the government is losing control of the gambling market.

Senior Consultant and author of the study Dr. Michael Schmid says, “Today, we find an extremely controversial political discussion in Germany. The upcoming renewal of Germany’s State Treaty on Gambling in 2011 provides an opportunity to correct the law’s undesirable effects, especially in the rapidly-expanding online gambling segment. The state will lose control of this market if the current prohibition on online gambling is continued.”

At 94%, the foreign market share in the betting segment is by far the largest. Of €7.8 billion in revenue, only about €240 million went to regulated providers such as Oddset/ DLTB football sweepstakes and a further €250 million to regulated horserace betting. About half of the total market, or about €3.9 billion in revenue, went to online sports betting services in 2009 but wager revenue for the sports betting service Oddset underwent a strong decline, with a decrease of €247 million or about 60% since 2005.

Furthermore, Germany’s so-called black market generates revenues of about €1 billion. Augmenting the shift to internet services, some formerly German-based providers have relocated their operations abroad. Altogether, the online market for gambling, measured in terms of gross gaming revenue, grew about 30% per year from 2005 to 2009, to around €1 billion in gross gaming revenue. (E-06.18.10)

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