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    Are Germany’s online gambling laws hurting its market and users?

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    Germany's strict online gambling rules are harming users and their experience, pushing players to black markets for better options.

    Germany is known for its efficiency and precision. However, things have not been quite as straightforward when it comes to German online gambling regulations.

    The country’s very strict licensing requirements have created a mess of red tape that’s becoming frustrating to navigate—for players and operators alike. The overall intentions may be good, but the reality is a complex system that’s not only suffocating the market but also pushing players towards less regulated, often riskier options.

    Germany's strict licensing system

    Germany’s new State Treaty on Gambling came into effect in 2021 and set the stage for a highly regulated market. It states that all online gambling operators in Germany must get a license to offer their services legally in the country.

    This process involves rigorous checks, tough compliance measures, and a large financial outlay. The regulator, Glücksspielbehörde, is vigilant and has even promised to take action against streamers promoting unlicensed operators.

    It’s clear that the goal is to protect players and ensure that every game played is fair—as it should be. This is a noble goal, but the implementation has had many up in arms. Operators are facing intense restrictions, including a monthly deposit limit of only €1000. There are also rules about there being at least 5 seconds between each slot spin.

    These rules are aimed at reducing problem gambling, but instead, they’ve stifled the gaming experience and pushed players away. In a world of instant gratification, no one wants to wait for their favourite online slot to take another spin… Other restrictions have also meant that new operators are not keen to enter the market at all.

    Black market boom

    Unfortunately, one of the biggest issues that has come from the strict rules and laws is that the online casino black market is now booming in Germany.

    According to recent reports, unlicensed casino operators generated a massive €648 million in gross gaming revenue (GGR) in 2023 alone. This not only shows a significant loss of tax revenue for the government but also highlights a preference among players for unregulated sites.

    Why? Because these casinos and sportsbooks offer more attractive odds, bonuses, and fewer restrictions. Which only leads to even more exciting and engaging gameplay.

    A similar story in Scandinavia and the Netherlands

    Germany isn't alone in its tough approach to online gambling laws. All across Europe, in countries like Finland, Norway, Sweden, and the Netherlands, regulators are struggling with similar issues.

    In online casinos in Norway, one of the many issues is the limited payment options available, which makes it hard for players to deposit and withdraw funds. This lack of flexibility is a major turnoff for users. Instead, they look to international sites with better payment options and fewer restrictions.

    In Finnish casinos, Swedish gaming houses, and gambling sites in the Netherlands, the situation is slightly different but equally frustrating for players. These countries operate under their own self-regulated licensing systems.

    This self-regulation means that Finnish, Dutch, and Swedish operators must jump through even more hoops to obtain a license, leading to fewer options and less innovation in the market.

    The result? Players are left with a limited selection of games and a less dynamic gambling environment. Once again, it makes the black market a more attractive experience, especially with the ability to use payment methods like crypto.

    What is the way forward?

    So, what’s the solution? There’s no doubt that a balance needs to be struck between regulation and what users experience. While protecting players is important, overly strict laws can backfire, pushing players towards unregulated and potentially unsafe alternatives.

    Germany and other European countries could benefit from a more flexible approach that balances regulation with innovation. Done correctly, this would allow the online casino market to thrive while still protecting consumers.

    Published: August 2, 2024

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    Deni avatar image

    Article by Deni

    CasinoWow Contributor

    Hi, I’m Deni and I am here to ensure you have all the information you need to make informed decisions about online casinos and games and, of course, have fun while doing it. I do so through in-depth research and a keen eye for detail resulting in comprehensive reviews and engaging articles. Let’s explore the iGaming world together!

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