The online gambling market and land-based market in Germany is expected to grow to EUR 3.3 billion over the next four years. According to market projections from Goldmedia, a leading consulting and research provider, areas such as lottery, sports betting, and casinos will grow exponentially. Much of this growth, they said, will come from the impact of COVID-19.
Growth of the online gambling market
The predicted growth is equivalent to EUR 1.1 billion between 2019 and 2024. In terms of the areas with the highest levels of predicted growth, online casino and sports betting, including eSports were the biggest sectors. In 2019, online casino grew 10.6% and sports betting grew 18.6%.
The report did note a decline in revenue for 2020. This accounts for 12.9% from 2019 and is due mainly to the decline in land-based casinos and betting.
A survey of customers
In addition to the predictions, Goldmedia did a survey of online gambling customers in Germany. Some 62% said they would prefer to use a locally-licensed operator if given the choice. This is good news for German providers who are facing tougher restrictions under the country’s online gambling market regime. A third said they would continue to play through unregulated operators.
Out of those surveyed, around 12% said they play slots daily. This rose to 32% weekly. It comes as no surprise that most gamblers use their mobile phones to play, accounting for 65% of gameplay. Customers are driven to betting sites via online advertising. Social media accounted for just 28% while friends recommendations were 28%.
In terms of monthly spend, just over 50% said they spend under 50 EUR. 48% of respondents said they spent more than that over the course of a month.
Regulation of the online gambling market
As of January, Germany adopted an experimental sport betting regime, allowing parties to apply for licenses from the regulators. They have been able to operate in a highly regulated environment, prior to the adoption of additional legislation.
In March of this year, German lawmakers approved gambling regulations that will legalise online poker and casino. It also provides legislation on the new regulating authority that will oversee the online gambling market. Then in May, Germany submitted the regulations to the European Commission.
While a range of new products will be offered to the market, there are significant restrictions. A limit of EUR 1000 is in place for all online gambling. Stakes on slots will be limited to EUR 1 and spins will average five seconds. For table games such as blackjack and poker, each individual German state has the opinion to maintain a monopoly.
Licensing and advertising
The cost of an online gambling license depends on the estimated annual revenue. Those with a turnover of less than EUR 40 million will have to pay 2% of stakes that total at least EUR 100. Those with stakes between EUR 40 million and EUR 65 million will have to pay EUR 80,000 plus a further 0.6% on total stakes over EUR 130 million.
All advertising will be subject to strict controls. Advertising can’t be shown between 9 pm and 6 am or around live sports broadcasts. Affiliates can’t negotiate based on deposits, revenue, or customer activity. This marks a significant change from practices in the rest of Europe. German operators raised concerns that short-term implementation of the legislation would make the online gambling market uncooperative and unattractive.
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