Sports betting and igaming software solutions provider Delasport has published a new report this week detailing the current state of the German gambling market – a sector that is undergoing significant transformation.
In recent months, the largest country in the European Union has taken significant strides to open the online gambling market to its population of more than 83 million. Here is what the market currently looks like…
The current market
Germany’s igaming market size was estimated at €2.8bn in 2021 and is expected to increase to €3.3bn in 2024. Germany is a technologically advanced country with 58.88 million mobile Internet users (87.4% of the total population), as reported by Hootsuite. The same study showed that 95.4% of Internet users aged 16 to 64 own a smartphone, 83.8% own a laptop or desktop computer, and 52.7% own a tablet. In terms of overall Internet users, Hootsuite found that 78.81 million people were regular users, which is equivalent to 94% of the total population – an increase of one million year on year.
German players show a high degree of interest in online slots and casino games and online betting. According to Goldmedia, 12% of those polled play online daily, and 32% play on a weekly basis.
A similarly high level of participation can be found in online sports betting, with 15% of respondents saying they bet daily and another 29% saying they gamble weekly.
Gambling legislation in Germany
Gambling in Germany is governed by a legal structure that includes both federal and state regulations. For the first time, the new 2021 Interstate Treaty on Gambling allows operators to provide online slots and poker on a federal level, in addition to sports betting, which is already available. The treaty establishes a common legal framework for gambling across the country, but governments are free to enact stricter regulations for executing the pact.
New regulation in 2021
The new Interstate Treaty on Gambling (ISTG 21), which took effect on July 1, 2021, incorporates some of the country’s most significant revisions to gambling regulation in recent memory. Online gambling, which was previously restricted to Schleswig-Holstein, is likely to be legalized across the country with operators having access to new licenses.
The new regulations do, however, have some technicalities. Deposit and betting limits will be more controlled, as well as how operators handle their advertising and taxing.
- Casino operators must have a registered office in the EU or EEA
- The operator’s website must have a German version with all necessary information in German
- Players must create an account that will be used to play on platforms by different providers
- Monthly deposits on websites are limited to €1,000 per player across all operators
- Each operator must have a clear opt-out button that puts players in a 24-hour exclusion (Cool Down button)
- Auto-play is not allowed in virtual slots, with each game lasting at least five seconds
- The stake for virtual slots is limited to €1 per game
- Poker players must be randomly assigned to a virtual table
- Online gambling ads cannot be shown between 6 am and 9 pm
- Live betting is no longer allowed.
Online sports betting, horse race betting, online slots and poker games are taxed at a rate of 5.3% of turnover. Due to changes to the German VAT legislation, which took effect on January 1, 2015, online casino games are subject to 19% VAT, regardless of whether they are operating illegally in the country.
To date advertisement is allowed, but:
- Advertising on telecommunication systems is prohibited (exceptions apply).
- Advertising must not be excessive.
- Advertising must not address minors or comparably vulnerable target groups.
- Games of chance must not be presented as a solution to financial problems.
- Radio and online advertising of online slots, online poker and online casino games is not permitted between 6am and 9pm.
- Directly before or during the live broadcast of sporting events, advertising for sports betting on this sporting event is prohibited.
- Advertising for sports betting with active athletes and officials is prohibited.
- In sports facilities, advertising for games of chance is only permitted in the form of umbrella branding advertising on jerseys and boards and similar advertising media.
The German regulator only allows a bonus of max €100 per year. Only a maximum 10% of a bet’s stake can be covered by the bonus.
Casino games in Germany
Joker theme video slots are popular with German casino players with games like Mystery Joker, All Ways Joker and Fire Joker. A very successful video slot that has got a lot of traction in the market for several years in a row is Book of Dead. Just like most other countries, slots lead the way in popularity, with table games such as Blackjack and Roulette also seeing a lot of action. Thanks to the high mobile penetration in Germany, many operators are creating their own spins on the classics with a focus on high-quality graphics, gamification and deep playing mechanics.
Sports betting in Germany
Football is by far the most popular sport in Germany, as it is in most European nations. As a result, it is no surprise that the sport has significant coverage among betting sites aimed at German bettors. All of Europe’s biggest leagues are represented, from the Bundesliga to the Premier League, La Liga, Serie A, and others. Domestic cup tournaments such as the DFB-Pokal and European events like the Europa League and Champions League are also well covered.
Handball has long been one of Germany’s most popular sports, so betting sites are naturally making wagers on it easily available. The Bundesliga, DHB Pokal, and Super Cup are among the most well-known national-level handball events, with competitions in Denmark, Norway, Romania, and other countries.
The growing popularity of eSports in Europe is strongly reflected amongst German betters. Currently, CS:GO is one of the most popular titles being wagered on, and virtually every major sportsbook now has an eSports section. The coverage ranges from the world’s biggest competitions, such as the major championships, through lower-level leagues.
Golf, tennis, boxing, racing, mixed martial arts, and athletics are also regularly wagered on, as well as table tennis, badminton, snooker, and darts. Horseracing is a huge market, but due to licensing issues, coverage is still somewhat mixed.
The German igaming market is second in size in Europe after the UK and before Italy. The market already attracts local operators like Tipico as well as international operators like bet365.
Choosing the right technology partner in the German market is important as regulatory requirements are relatively complicated and require significant development effort.
Delasport sports betting and online casino solutions are fully compliant with the German regulation and the company already supplies its Software to partners in the market.
The German market size is expected to continue to grow with circa 10% y2y increase. Operators and software suppliers are waiting for the entire regulations process to be completed as there are still areas of uncertainty.