Over 40% of German Players Could be Lost to Offshore Providers

A study into the possible repercussions of the new German State Treaty on gambling has found that draconian player protection measures could force 40% of players to the black market.

The study, which included a survey of 2,000 private individuals, was undertaken by the Handelsblatt Research Institute and was commissioned by Eco, a trade association for the internet industry.

President of the Handelsblatt Research Institute professor Bert Rürup said the data had revealed that the majority of players in online casinos react strongly to changes in gaming conditions.

“This means that if the playing conditions change on the online casino site where they have been playing up to now – for instance, in the form of poorer chances of winning, lower betting limits or slower playing speeds – over 40 percent of online casino players would look for an offer where the playing conditions have not deteriorated”, he said.

Eco highlighted that the German federal states’ 5.3% gaming tax on stakes could make the legalised offer so unattractive to prospective punters that they disappear from the German market in the medium term.

Moreover, it is likely that those players would resort to illegal, non-regulated offers where no adequate player protection is guaranteed.

Eco honorary president professor Michael Rotert said: “The new State Treaty on Gambling is an important step towards a modern German gambling regulation, but there is also a need for improvement. Liberalisation and channelling should be the basic idea of regulation in the State Treaty on Gambling and also in taxation.

“The legislator should therefore design its regulation in compliance with the law and, above all, the market, so as not to thwart its original objective of opening up and liberalising the market. This is being jeopardised by the tax plans of the German federal and state governments.”

Rotert pointed to the jurisdictions like Denmark, Spain and Italy as examples of best practice in terms of channelling.

Eco also highlighted a need for improvement with regard to data protection. In particular, the planned state blocking file, with which players can be excluded from gambling.

“A sensible regulation that allows for state control consists in opening the online gambling market to licensed providers that are under state control. This must not be jeopardised by plans for taxation and excessive data collection and restrictive regulations, because this survey has also confirmed how important the protection of personal data is to people”, Rotert said.

As a result of the survey findings, Eco has recommended that legislators make adjustments from a data protection perspective and has called for an objective debate.

The German Bundestag is currently debating a draft bill for a new Racing Betting and Lotteries Act – among other things, this will provide for the introduction of a new gaming tax.

The new German State Treaty on Gambling is scheduled to come into force in July.