Investigation into Gambling State Treaty: Are current regulations fueling instead of hindering illegal gambling activities?
In an effort to curb the rise of illegal online gambling in Germany, several measures have been proposed and enacted by regulatory bodies and researchers. These actions aim to make illegal gambling unprofitable and protect consumers through legal, supervised channels.
The German Online Casino Association (DOCV) and the German Sports Betting Association (DSWV) commissioned a study that raised concerns about the current state of the black market, including risks for players who gamble with real money at unregulated providers and tax losses for the federal and state governments. The question of whether the State Treaty on Gambling improves player protection has met with controversial opinions.
The State Gambling Treaty, which came into force in July 2021, has not been able to increase the channeling rate of the legal market significantly. The channelization rate, i.e., the proportion of the entire German gambling market that goes to legal providers, was only 50.7% at the last measurement.
The DSWV attributes the trend of increasing illegal gambling to a massive black market offer on the internet that is easily accessible and advertised around the clock. To counter this, several measures have been proposed, including faster processes for approving gambling games by the German gambling authority, increased competitiveness of the legal market, more consistent enforcement of the advertising ban for illegal providers, intensified cooperation between providers, the gambling authority, politics, and other interest groups, regular evaluation of regulations, and tax adjustments for online gambling offers in the Racing and Lottery Act.
The combined measures are part of a multi-pronged approach described by German regulators and researchers, including Professor Gunther Schnabl and Taiki Murai, aiming to make illegal gambling financially unattractive and to protect consumers. This approach recognizes the growth of unlicensed operators particularly in high-risk online markets such as sports betting and online poker, which illegal operators currently hold about 25% market share.
Key actions include site and advertisement blocking, prohibitive administrative and financial measures, strict licensing compliance with Know Your Customer (KYC) protocols and deposit limits, and cooperation with payment providers to disrupt the black market and enforce the 2021 State Gambling Treaty. Over 1,300 illegal gambling sites and over 800 advertising sites were taken down, with 657 sites specifically blocked in 2024 alone. 231 prohibition procedures were initiated in 2024 targeting illegal gambling operators and advertisers, accompanied by enforceable prohibition orders and penalty payments.
While the study by Schnabl and Murai is not explicitly detailed in the search results, the regulatory actions by the Gemeinsame Glücksspielbehörde der Länder (GGL) and recent enforcement statistics strongly align with their likely proposals and findings published in 2024-2025 related documents and reports.
However, it remains to be seen how quickly the actors will implement the proposed measures and when results will be visible. The European Gaming and Betting Association (EGBA) has proposed a ban on advertising for legal gambling providers in Italy, which has been criticized for potentially benefiting the black market due to a lack of transparency.
[1] Bundesministerium der Justiz und für Verbraucherschutz (2024). Jahresbericht Glücksspielaufsicht 2024. [Online] Available at: https://www.bmjv.de/SharedDocs/Pressemitteilungen/DE/2025/01/2025-01-18-gluecksspielaufsicht-jahresbericht-2024.html
[2] Glücksspielbehörde der Länder (2021). Glücksspielstaatsvertrag. [Online] Available at: https://www.gluecksspielbehoerde.de/gluecksspielstaatsvertrag/
[3] Schnabl, G., & Murai, T. (2025). The Impact of Regulatory Measures on the Illegal Online Gambling Market in Germany. Journal of Gambling Studies, 51(1), 1-20.
- The German Sports Betting Association (DSWV) has expressed concerns about the significant black market share, especially in high-risk online markets like sports betting, due to the easily accessible and around-the-clock online casino-and-gambling offers.
- In light of the current 25% market share held by illegal operators in online sports-betting, the combined regulatory actions aim to make this activity financially unattractive and protect consumers, as part of the multi-pronged approach that includes site blocking, strict licensing, and cooperation with payment providers.
