The 5th iGaming Germany Conference was held in Frankfurt on April 1-2. Industry leaders, legal experts, and regulators gathered to discuss the state of the German gambling market.

Among the delegates was our CEO, Dr. Andreas Ditsche, who took to the stage to talk about a topic that resonates throughout the iGaming sector – Ethics at Stake: Can the Gambling Industry Play Fair?

During his session, Andreas covered the complex ethical landscape that gambling operators must navigate, especially in highly regulated markets like Germany.

Among the challenges are the alarming rate at which the black market is growing and its negative impact on player protection and sustainable business practices.

The Black Market Problem in Germany

While much of the conference focused on the regulatory landscape and its impact on affiliate marketing strategies, a recurring theme throughout the event was the rapid growth of the black market in Germany.

Speakers and panelists estimate that black market platforms dominate up to 80% of the online gambling market in Germany. In addition, they pointed out that illegal gambling operators not only lack player protection but also evade taxation.

In contrast, regulated markets like the UK, Sweden, and Denmark have achieved high channelization rates, roughly 80% or higher, while it is estimated that channelization is as low as 20% to 40% in Germany.

This ongoing trend is underlined by the decline of online slot tax revenue, which has dropped by 70% since the introduction of regulated online gambling. If anything, it raises concerns about the strength of the market and whether reform is needed.

The Impact on Problematic Gamblers

An important issue raised at the conference was the impact of the black market on problematic gamblers. It was established that players struggling with gambling addiction are often driven to black market operators where there is no support or resources to protect them.

Problematic players typically engage in risky behavior, often increasing the stakes to chase heightened thrills. These players are more likely to be identified in legal markets, thanks to player monitoring systems. Eventually, they turn to the black market, where players can bypass geo-restrictions using tools like VPNs.

This raises several ethical questions for the online gambling sector:

• How can operators claim to promote player protection when a high percentage are funneled into risky environments?
• Shouldn’t gambling operators focus on player welfare and responsible gambling, not just regulatory compliance?

Repression and Law Enforcement

At the same time, there was doubt among attendees whether repression, such as penalties, could drive players toward regulated markets. Besides, the internet is borderless, which allows black market websites to operate beyond the reach of regulators.

Although the German Gambling Authority (GGL) works with national and international law enforcement agencies, the decentralized nature of the internet makes it hard to prevent black market gambling. At the same time, a recent court ruling again confirmed that IP blocking is not available to the GGL.

Many industry insiders believe the current regulatory framework in Germany only covers a small fraction of casinos and sportsbooks. Without the means to block access to unlicensed platforms, most players still turn to black market operators.

Player Protection

Compliance was another central topic of the conference. Speakers underlined that operators, advertisers, and affiliates must go beyond the bare legal minimum and promote responsible gambling. While regulation is an important part of the equation, stakeholders can do more to prevent addiction.

Some argue that operators could promote the advantages of regulated markets more proactively. One advantage that was mentioned is how much longer it takes to experience substantial losses. Statistically, it takes 14 hours to lose the deposit limit of EUR 1,000 with a regulated slot game and a 90% RTP.

Introducing effective strategies has the potential to prevent players from losing control. Meanwhile, operators must join forces to maintain the long-term sustainability of the gambling market.

One of the most promising developments is to create standardized markers of harm across all EU markets through programs such as GamProtect.

Striking a Balance for a Fairer Gambling Market

The 5th iGaming Germany Conference served as a stark reminder that there is much to be done to improve the reputation of the market and protect players.

Regulatory compliance alone is not enough, and a sustainable market requires a unified approach. Operators and other stakeholders have an ethical obligation to promote the long-term well-being of players.

With the rise of the black market and the many challenges that regulators in Germany face, the way forward requires collaboration, vigilance, and commitment to safer gambling.

The conversations at the conference will undoubtedly help to shape the market for a sustainable future. However, it will take unwavering commitment and dedication.