Germany has one of the world’s largest mobile gambling markets, despite currently having no licensed providers.
The mobile gambling market is exploding worldwide, topping 17 percent of the total iGaming market share in 2013, according to a report from Juniper Research. The Irish sportsbook Paddy Power reported that 51 percent of its iGaming revenue came via mobile devices last year; while Juniper predicts that in 2018 164 million people worldwide will play a casino game, place a bet or purchase a lottery ticket using a smartphone or tablet. One country in which the mobile phenomenon has caught fire is Germany.
It appears Germans are interested in more than producing high-quality manufactured goods, drinking beer and eating delicious apple strudel. A report from Online Casino Deutschland shows that they are insatiable mobile gamblers. According to data mobile gambling revenue from German punters is growing by 19 percent per annum and the country is now one of the world’s largest markets, despite the fact that online casinos in Germany don’t exist.
The curious case of German gambling laws
• A report by Online Casino Deutschland found that the German mobile gambling market is growing by 19 percent annually, and is now one of the world’s largest
• The German Gambling Authority will issue 20 online sportsbook licenses this year, but online casinos will remain unlicensed
• Germany will continue to lose revenue from punters using foreign-based online casinos
While the impressive growth figures should be exciting for iGaming operators, it has been met with a lukewarm response by firms. Why? Because they can’t yet receive licenses to serve German bettors. The German government refused to license online gambling providers until December 2011, when the state of Schleswig-Holstein used a legal technicality to license twelve foreign companies including PokerStars, BwinParty, Bet365 and Ladbrokes. Prior to this the state-run Oddbet had an official monopoly on internet betting in the country.
These gambling providers attempted to use their Schleswig-Holstein licenses as grounds to serve the rest of Germany, which brought immediate resistance from other state governments and the federal government. A new interstate treaty was called with the purpose of clarifying internet gambling laws across the country. Each state signed the treaty, which provided for the issuance of 20 sports betting license. No online or mobile casino licenses will be issued, much to the chagrin of hopeful online casinos.
The federal gambling regulator is currently in the unbelievably long and opaque process of reviewing license applicants. Once approved, the 20 license recipients will be able to operate mobile and online sportsbooks in Germany. Until then (which authorities claim will be later this year) Germans will continue to bet extensively using smartphones and tablets. They will just do it with foreign-licensed bookmakers.
Huge growth in an unregulated market
Despite its refusal to license providers as of yet, the Germany authorities have no laws in place to prevent citizens from using mobile gambling services based elsewhere. And they do, in great numbers. German gamblers are served by essentially all major online casinos and sportsbooks, including such big names as Bet365 Casino, Mr. Green, All Slots, Spin Palace and BetVictor. Each of these accepts wagers in US Dollars and Euros and offers services and support in both English and German.
A report by Online Casino Deutschland stated that the rising popularity of mobile among Germans is due to its convenience and the constant upward trajectory of new games. Said a company spokesman:
“The development of safe, secure and reliable mobile sites has encouraged German players to switch to portable alternatives and analysts predict that the mobile gaming market will double within the next three years. It’s evident that Germany has established itself as a leader in the mobile gaming market and analysts agree further growth is to be expected as the industry is still evolving.”
We think it’s great that Germans are able to freely access online casinos and sportsbooks wherever they are located. But we don’t understand why the German authorities are licensing bookies but not online casinos. Each time a German places a bet with a British, Antiguan or Canadian internet casino both gambling industry revenue and potential tax dollars fly out of the country. One would expect a government world-renowned for pragmatism and efficiency to see that and choose the best path forward. But it currently plans only partially liberalize the iGaming market, and money will continue to leave Germany bound for places like the UK, Gibraltar and Antigua.
What to expect for online and mobile casinos in Germany
The German Gaming Authority accepted the final round of applications for the 20 licenses on March 14. Even if all goes well, the first licenses won’t be issued until this summer. We expect licensed betting sites to launch sometime this fall. But there are no indications that online casino licenses will be issued anytime soon. That shouldn’t much bother gamblers, who are free to use one of the countless foreign-operated providers. But it is a self-inflicted wound for the German government, which won’t be able to skim tax revenue off of wagers made by German punters.