There is no denying that the online gambling market has become one of the biggest sectors in the world. Regardless of which country you visit, you can easily see how this market has become bigger and bigger. The one problem that Germany and many other countries have been facing is the fact that the black market has become bigger and bigger as well. This is not good news as it means that the gambling market is therefore comprised and not as well-regulated as it should be.


Germany tried to combat this with their gambling treaty; however, as figures now suggest, the black market is growing, and now the treaty is starting to face some serious backlash. This is a critical area that Germany needs to find a solution to.


A Growing Divide Between Legal and Illegal Gambling


The German Sports Betting Association (DSWV) has raised alarms about what it calls a “structural problem” within the market. Despite efforts to expand the legal sector, a significant portion of gambling activity continues to take place outside the regulated framework, which is truly far from ideal.


According to the "Gemeinsame Glücksspielbehörde der Länder" (GGL), Germany’s federal gambling regulator, gross gambling revenue from the licensed market increased by 5% in 2024, reaching €14.4 billion (£12.3 billion). Tax and levy revenues followed the same trend, climbing to around €7 billion (£6 billion). Players seem to be playing more than ever, with no deposit bonuses in Germany at betterbonus.com showcasing that even the bonus codes that players can engage in are getting higher and higher. On paper, these numbers highlight growth and stability within the licensed industry but this is not actually the case.


There are many black-market operators still in play. The question is "why?" If Germany has such a strong treaty, why are black markets still a thing? Well, a lot of people think it's because the treaty is too strong. Players don't feel like they can play freely under the treaty and therefore would rather go for other online casinos that might not be vetted by Germany, but that at least give them free rein.


Enforcement Actions by the Regulator


The GGL has worked to show that it is actively tackling the black market. In 2024, the regulator reviewed over 1,700 websites suspected of operating illegally and initiated 231 prohibition proceedings, a significant increase from 133 the year before.


The regulator also stated that around 450 illegal gambling sites are now inaccessible in Germany due to prohibition orders. On top of this, an additional 657 websites have been blocked through geo-blocking measures introduced under the EU’s Digital Services Act.


These enforcement efforts have been paired with other measures:

  • Stronger monitoring of suspicious advertising.
  • Greater cooperation with payment providers to disrupt financial flows.
  • Stricter reporting requirements for licensed operators.

The Dispute Over Market Size


The real point in the debate is the actual size of the black market. The GGL estimates that illegal German-language gambling websites account for about €500 - 600 million (£429 - 515 million) in market volume. That equates to roughly 3 - 4% of the total legal market, but when looking at high-risk areas like virtual slots and online sports betting, the share is closer to 25%.


The DSWV, however, disputes these numbers. Industry stakeholders and independent studies suggest the figure could be much higher. Some research indicates that nearly half of all online gambling in Germany occurs on unlicensed platforms, which paints a much bleaker picture of how effective current regulations really are.


The DSWV’s Five-Point Action Plan


In response to these ongoing challenges, the DSWV has put forward an action plan aimed at strengthening the legal market while reducing the appeal of unlicensed operators. The key recommendations include:

  • Making the legal market more competitive so players are less tempted to turn to offshore websites.
  • Creating a national gambling prosecutor’s office dedicated to tackling illegal operators.
  • Tracking financial flows, including cryptocurrency transactions, to limit the ability of unlicensed sites to move money undetected.
  • Holding advertising platforms accountable for promoting illegal gambling services.
  • Advocating for harmonized EU-level regulations that make cross-border enforcement easier and more effective.
  • Encouraging transparency in regulatory reporting to build trust among industry stakeholders.
  • Expanding the range of legal gambling products to compete directly with unlicensed platforms.

Balancing Protection and Competitiveness


Both the regulator and industry stakeholders agree on one point: solving Germany’s gambling issues will require a balance between strict player protection and a market that can compete with offshore platforms. If regulations remain overly rigid, they risk driving even more players toward unlicensed sites that do not offer the same level of protection.


Looking Ahead


The regulator’s latest report and the warnings from the DSWV highlight just how complex the German gambling landscape has become. On one hand, revenues and tax contributions from the legal market are growing, proving there is demand for regulated gambling. On the other hand, the strength of the black market suggests that current regulations are not enough to keep players from seeking alternatives.


It's not going to be easy to come up with a new treaty. The one that Germany had was already something that they thought would work without a problem; however, they underestimated the power of the black market and how it could infiltrate. Therefore, next on the agenda for Germany is coming up with amendments that they can make to ensure that their online gambling sector is safe and secure for all players.