Germany has a reputation of being one of the worst gambling markets in Europe, and the ruling party – the Christian Democratic Union (CDU) – now has a clear path to change that.
A reform proposal compiled by the Economic Council – a business association linked to the CDU – has made the case that the 2021 German State Treaty on Gambling is in dire need of legislative changes to save the domestic market.
To briefly put German gambling into perspective, the regime taxes slot game wagers at 5.3% per play as opposed to having a GGR-based tax model, with online stake limits at €1 per spin.
On the sports betting side, the German Sports Betting Union (DSWV) calculates that there are 11 times more illegal betting providers than licensed ones.
And to top it all off, H2 Gambling Capital estimates channelisation rates to be between 22% and 25%, going down to 20% by 2030.
The need for a change is evidenced by the above, and an evaluation of the Treaty is scheduled to conclude by the end of this year. The Economic Council’s proposals are aimed at advising the CDU on how it can act decisively so that this evaluation is done as efficiently as possible.
The document recognises all of the above as areas requiring urgent attention, setting forward a number of recommendations to address them.
Gambling priorities set for Germany
First and foremost is the restructuring of the Treaty’s legal objectives, balancing what the Council labels as the “Freedom” and “Responsibility” pillars.
In other words, placing equal importance on player protection and facilitating the freedom of choice of adult citizens – with overregulation being a main topic of content over the last few years.
Secondly, the proposals for a complete rethinking of how the gambling framework is assessed, suggesting the implementation of continuous independent research and a “rolling evaluation clause” that periodically discusses ineffective rules instead of renegotiating the entire Treaty at once.
In terms of channelisation, the document recommends routine evaluation of individual regulatory interventions to establish their impact on player behaviour, alongside a stronger focus on illegal gambling prevention rather than restrictions on licensed providers.
Licensing is also recommended to become more streamlined, moving away from the current division of products and separate approvals.
Given that the CDU is the current party in power, the recommendations have a clear shot of soon becoming official policy and ending the bad reputation that Germany has as a gambling market – with the European Gaming and Betting Association (EGBA) adamant that it will be difficult for the country to move forward with the current regulations in place.