German and Italian Consumers Turning To Illegal Casinos

The German and Italian gambling regulators have expressed their concerns about the growing numbers of local consumers preferring illegal online casinos over local operators that hold a licence. Sam Brown, the director of Rootz Casino, a licenced online casino in Germany, believes that as much as 80% of online gambling in the country takes place at illegal online casinos.

Just over two years ago, Germany introduced a reform of its gambling law. Since then, online casinos can only operate in Germany if they have a licence that is issued by the local gambling regulator. Since the beginning of 2023, the Gemeinsame Glücksspielbehörde der Länder (GGL) has been the supervisor of the regulated gambling market in Germany. Based on recent reports, most German consumers make their wagers at online casinos that don’t hold a GGL-licence. In Italy, similar developments have caused concerns amongst local authorities with the unregulated sector taking 75% of the market share.

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Betting Limits and Deposit Caps

Two weeks ago, the annual gambling conference Bundeskongress zum Glücksspielwesen took place in the German capital city Berlin, where attendees discussed the results of the first two years after the reform of the gambling law. The regulator, healthcare institutions and gambling operators expressed their concerns about the increase in illegal gambling amongst German players which is believed to be due to strict measures that the industry must adhere to. The €1 ($1.76 NZD) betting limit on online pokies and a monthly deposit limit of €1,000 ($1,764.00 NZD) are two of the most significant measures and are believed to push local consumers towards alternative websites that are not limited by these rules.

One of the speakers at the conference on gambling was Sam Brown, director of Rootz Casino, a German licence holder. Brown stated that since the reform of the gambling law there has been an increase in illegal gambling in Germany. He shared recent data showing that monthly deposits averaged €350 ($617.50 NZD) before July 2021, whilst gross revenue per player averaged €141 ($248.52 NZD). According to recent data from Rootz Casino, average monthly deposits have dropped to €150 ($264.60 NZD) per month, or 80%. Gross revenue per player has also almost halved to an average of €73 ($128.68 NZD).

The director of Rootz Casino believes that the strict deposit and maximum wager measures the illegal market has benefited from these developments as it is not limited to these measures. He is therefore in favour of a personal approach to players who are considered problem gamblers, instead of country-wide restrictions in Germany.

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80% of German Players Wager At Non Regulated Casinos

Brown believes that as much as 80% of online pokies are now played at illegal online casinos which would mean that the share of legalised betting companies is only 20%. A year ago, the German regulator announced that regulated gambling sites would need to have a market share of the full 100%. To limit the availability of non-regulated companies, the GGL blocks IP addresses and payments from unlicensed online casinos. Websites allowing ads by illegal online casinos are also blocked from the German web.

At the end of September, gambling industry actors requested the German government for yet another set of new changes to the gambling law, just over two years after the introduction of the law. An updated gambling law is needed to provide better protection for gambling companies and players against illegal offerings. Local trade associations also pointed out that the current measures are considered too strict, making the legal offer a lot less attractive.

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Similar Developments in Italy

Similar developments can be seen in Italy. According to the Italian newspaper La Gazzetta dello Sport, gambling companies available in the country generate €25 billion ($ 43.5 billion NZD) in annual turnover. Of this, 75% € 18.5 billion or approximately $ 31.9 billion NZD) comes from illegal online casinos. The increasing number of Italian players moving towards unregulated casinos is said to be due to a strict ban on gambling ads in the country. The Turin Public Prosecutor’s Office is currently conducting a large-scale investigation into these illegal gambling companies.

Despite the market position of illegal online casinos, the Italian regulator ADM states it is heavily combatting unregulated websites. ADM comments that it has managed to block almost 10,000 illegal gambling sites since the beginning of 2023, an increase of 400 websites in comparison to last year. Yet it seems impossible for the regulator to block all operators as new websites are launched on a daily basis. After ongoing investigations, the Turin Public Prosecution Service says that a lot of unlicensed online casinos that are available on the Italian net are said to be used by criminal organisations to launder money.

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