Date: 28.01.2025

by Adam Dworak

German Gambling Sector Faces Black Market and Tax Challenges

Germany’s gambling industry is grappling with a growing black market and the impact of a controversial turnover tax, according to industry leaders speaking at the ICE conference. Mathias Dahms of the Deutscher Sportwettenverband (DSWV) and Dirk Quermann of the German online slots and casino group highlighted these issues during a panel discussion.

Black Market Activity

Mathias Dahms, president of the Deutscher Sportwettenverband (DSWV), warned of the increasing prevalence of black market gambling in Germany, criticizing the GGL’s estimates as too conservative.

“We are quite sure the [black market] estimates of the GGL are far too low. Up to now, we don’t see that the GGL is really recognising this black market problem we are all facing in our daily work,” he told attendees.

The GGL’s 2023 report estimated the black market accounted for approximately 4% of Germany’s gambling market, with gross gaming revenue (GGR) between €400 million and €600 million.

This figure was challenged by industry representatives, including the DOCV (the German online slots and casino association), who argued that the black market share for online gambling alone could be closer to 20%.

Simon Priglinger-Simader, DOCV vice president, previously noted that the GGL’s figures inaccurately represented the scale of illegal activity by comparing black market revenues to the total market, which includes land-based gambling and other channels.

Turnover Tax

Another pressing issue raised was the 5.3% turnover tax on stakes, introduced in 2021, which has reportedly made the German gambling market less viable for operators. While stakes in sports betting rose by 4% in 2024 compared to the previous year, they remain 15% lower than before the tax was implemented.

Dirk Quermann, president of the DOCV, emphasized the detrimental impact of this tax structure on the industry. “We are paying on the basis of stakes, which for slot games or virtual slot games, is not the right basis to tax these products,” Quermann explained.

He warned that unless policymakers, the GGL, and operators reach a consensus on regulatory reform, the market’s viability will remain at risk.

Dahms echoed these concerns, cautioning that both customers and operators might increasingly turn away from the regulated market if the issues are not addressed.

“We have to intensify our talks with politicians and with the authority on these problems we’ve already described. Otherwise, customers will continue to leave the regulated market and also the operators will withdraw themselves from the market,” he stated.

Collaboration with Regulators

Despite the challenges, industry leaders expressed optimism about improving collaboration with the GGL.

Dahms noted, “I’m quite confident that someday, to some extent, we will come to a common understanding and then come to the right conclusion from that.” Both the DSWV and DOCV reaffirmed their commitment to working with regulators to find solutions.