DOCV Criticizes Underestimation of Germany's Black Market and Urges Accelerated Review of Gambling Treaty

Germany’s black market is significantly larger than the country's regulator claims, argues the Deutscher Online Casinoverband (DOCV), as it advocates for a faster review of the State Treaty on Gambling. The Gemeinsame Glücksspielbehörde der Länder (GGL) released an update on Germany’s regulated gambling market in June, estimating the illegal market to be worth €600 million, or about 4% of the overall sector.

This update comes as the GGL prepares to review the effectiveness of the State Treaty on Gambling, implemented in 2020, which opened the regulated market for sports betting, online slots, and poker. This review is scheduled for 2026, but the DOCV warns this delay could allow the illegal market to grow unchecked.

The estimate has been met with backlash from various stakeholders who dismissed it as grossly underestimated. The DOCV believes the true size of the black market is misrepresented, especially when compared to the entire market across all channels. “The GGL stated the [black market] market share of around 4%. You would have €400 million to €600 million in illegal online gambling and €3 billion of legal online gambling, which would be a 20% market share for the black market,” DOCV vice-president and Entain regulator affairs counsel Simon Priglinger-Simader told iGB. “That’s something we really think is not ideal, to be diplomatic, because the GGL could have easily said they see the black market in the online sector is around 20%.”

The regulator may soon update its figures, as a study commissioned by the GGL last December is expected to be released soon, providing updated estimates for the size of the black market and strategies for tackling it. “That’s something that we are really looking forward to hearing about because it could be an important and interesting step forward,” Priglinger-Simader concluded.

Priglinger-Simader echoed the findings of a University of Leipzig study released in November 2023, commissioned by the DOCV and Deutscher Sportwettenverband (DSWV). The study, authored by Dr. Gunter Schnabl, indicated that 50.7% of players were gambling in the regulated online sector, with 49.3% using unlicensed EU providers or illegal offshore sites. “There’s always a bit of politics. It’s easier for them to share a number for the online black market [in comparison] to total market,” he said.

The association plans to release updated figures on channelisation rates in the market next month, based on data from Entain and audience data specialist Nielsen. This is crucial as the black market remains the biggest challenge for licensed operators in Germany. Priglinger-Simader noted that the GGL is struggling to enforce IP blocking rules for illegal operators due to various legal challenges, and IP blocking was halted earlier this year amid these challenges.

The GGL is expected to release its final evaluation of the German market towards the end of 2026, though the DOCV anticipates delays. June’s update was published six months later than planned, leading Priglinger-Simader to warn, “We expect this [final report] not to come before 2027, which means for some of the measures, they will definitely have to find a way to implement those earlier on, because it will be three more years for the illegal market to thrive without having any consequences.”

Priglinger-Simader expressed sympathy for the challenges faced by the regulator, including a lack of staff, resources, and funding. “We acknowledge that the GGL has been fully active now for only one year, it’s not easy for them to set up the whole regulator and also try to implement it all.”

When addressing regulatory challenges noted by operators, he remarked, “it’s just not easy to make money [in Germany].” High tax rates, overly restrictive regulations on slots, such as minimum spin speeds, and the requirement for game certification for each operator are stifling the market. This is evidenced by a 38% decline in tax revenue from online slots between 2022 and 2023. “Everyone can see that the legal market numbers have been decreasing over and over, which just shows that it’s challenging,” he said.

By fLEXI tEAM