The German sports activities betting authority requires political intervention

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German sports betting revenue fell sharply by 20% in 2020, mainly due to canceled sporting events and the closure of betting shops due to the COVID-19 outbreak.

According to the sports betting tax from the Federal Ministry of FinanceTotal sales amounted to € 7.8 billion, 16% below the industry high of € 9.3 billion in 2019.

If the months of January and February are not factored in – since the COVID-19 pandemic was less far-reaching and the restrictions less stringent – the total loss drops to 20%.

The industry hit its lowest point from March to May 2020, but saw a noticeable increase in betting activity from June as the summer sporting events resumed. Sales stabilized until September and have remained constant since then, but are nowhere near the 2019 high.

With regard to taxes, the national contribution of sports betting providers decreased from EUR 464 million to EUR 389 million.

The German Sports Betting Association (DSWW) has pointed to pandemic restrictions as the main reason for the losses, particularly the closure of retail betting shops and the postponement of popular sporting events like the Bundesligaresulting in a severe drought for customers.

In the midst of the crisis Mathias DahmsThe president of the DSWV was forced to defend the industry against claims that have benefited from the pandemic and has called for government intervention.

"The exact opposite is true," he began. “During the first lockdown in spring 2020, when all European leagues had stopped their gambling activities, the German sports betting market collapsed completely: in April by 90 percent compared to the previous year, in May by 75 percent. Without sport, of course, there can be no sports betting. "

“During the current lockdown, all 5,000 to 6,000 betting shops across the country are closed or have been thrown back to operations with reduced acceptance points. The approximately 25,000 employees are mostly on short-time working and fear for their work, the operators for their entrepreneurial existence.

“Many won't hold out much longer, also because the federal government is refusing the betting offices the promised Corona aid for November and December. We therefore need a planning perspective from politicians as soon as possible, as to how safe business operations under hygienic requirements will be possible again in the coming months. "

However, COVID-19 is not the only cause of the German betting industry's financial troubles as illegal black market betting websites have seen a noticeable increase in activity.

Since the transition to virtual gaming machines came into effect in October 2020, the number of bettors switching to illegal websites mainly registered in Asia and the Caribbean has increased, resulting in an average drop of 54%.

Dahms continued: “It is becoming clear that the strict regulations for virtual slot machines have turned the market away almost overnight – unfortunately in the wrong direction.

“It is unrealistic to believe that German customers will get used to the excessive restrictions of the State Treaty and return to licensed providers as long as they can play with competitors who offer them much better conditions.

“We urgently need improvements to the regulations and effective enforcement against illegal offers. Otherwise, established providers willing to regulate will withdraw from the German games market. "

The betting companies also struggled to obtain nationwide licenses, which were approved by the federal government in October after years of political and legal debate. Although 21 have been awarded, another 40 have yet to be approved.

Dahms argues that this situation has resulted in the 21 licensed companies adhering strictly to the law, while unscrupulous betting websites “operate completely undisturbed” and the industry experiences a “massive consumer exodus” into the unregulated betting market.

"We therefore urgently appeal to the state governments to put an end to this untenable situation," he concluded.

“All open concession applications must be decided immediately in order to create fair market conditions for all providers. It cannot be that the licensed providers are currently suffering from this. "