- New study examines effects of state restrictions on gambling market
- Prof. Bert Rürup: “Players in online casinos react very sensitively to changes in gaming conditions. Politicians should take this into account when making changes to the legal framework.”
- German federal government should review the figures on market volume on which the legislation is based
The gambling market in Germany is in a state of upheaval. Online gambling offers, in particular, are enjoying increasing popularity. Current surveys have come to the conclusion that three-quarters of the German population have already participated in commercial gambling offers (online and offline). It is, therefore, right that the legislator creates a legal framework here. For the same reason, however, the topic of regulation of online gambling also requires special political tact.
In this respect, the year 2021 marks a turning point for the German gambling market. With the new State Treaty on Gambling, which came into force at the beginning of July, online gambling providers will be able to obtain licences for the entire German market for the first time. These offers are regulated by licensing requirements. These restrictions – such as a 1,000 Euro limit for monthly deposits into the gaming account, a limit of one Euro on stakes per round, and a minimum game duration per round of five seconds on average – as well as a worsening of the chance of winning that goes hand in hand with licensing through taxation are likely to cause evasive reactions among players, which are easy to implement especially in the online sector – due to lower barriers to switching to other offers compared to the terrestrial sector. This is the conclusion of a recent study conducted by the Handelsblatt Research Institute on behalf of eco – Association of the Internet Industry.
Findings from a current representative population survey of 2,000 private individuals, on which the study is based, suggest that the planned new state restrictions could counteract the protection which is intended for players, as players would then partly migrate to non-regulated providers with better gaming conditions. eco recommends that the legislator readjust from a data protection perspective and calls to keep the debate objective.
Prof. Bert Rürup: “Players in online casinos react very sensitively to changes in gaming conditions. Policymakers should take this into account when making changes to the legal framework.”
“Our data show that the majority of players in online casinos react very sensitively to changes in gaming conditions,” explains Prof. Bert Rürup, President of the Handelsblatt Research Institute. “This means that if the playing conditions change on an online casino site where they have been playing so far, for example, in the form of poorer odds, lower betting limits or slower playing speeds, over 40 per cent of online casino players would look for an alternative offer where the playing conditions have not deteriorated.” The gaming tax of 5.3 % on stakes, which is planned by the federal states and extremely high in European and international comparison, could make legal and licensed offers so unattractive that they disappear from the German market in the medium term, and players prefer to fall back on illegal, non-regulated offers in which no adequate player protection is guaranteed.
eco, therefore, recommends that adjustments be made here: “The new State Treaty on Gambling is an important step towards more 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 accordance with the law and, above all, in conformity with the market, so as not to counteract its original objective of opening up the market and liberalisation. This is endangered by the tax plans of the federal and state governments,” says eco Honorary President Prof. Michael Rotert.
This is particularly important because the exchange with the industry has shown that it could be about a much larger market than the underlying figures of the legislation suggest, Rotert continues: “The German federal government should enter into a constructive exchange with the industry here in order to prevent collateral damage in player protection as well as a migration to the black market.”
The complete German-language study (with an Executive Summary in English) is available for download free of charge here.
