Germany’s online slots struggling with low channelisation and rising black market, local trade body says

Channelization rates for online slots in Germany are estimated to be as low as 20% to 40%, raising concerns about the strength of the regulated market, according to online casino trade body Deutscher Online Casinoverband (DOCV).   

Speaking at the DOCV’s industry networking event at ICE (January 21), DOCV President Dirk Quermann cited academic estimates showing a significant portion of German online slot players are turning to unregulated operators. In contrast, sports betting channelization is higher at 60%-70%, according to Mathias Dahms, president of Deutscher Sportwettenverband (DSWV).  

Germany currently has 29 licensed online betting operators, Dahms said, which collectively recorded €7.3 billion ($7.7 billion) in stakes in 2024, generating approximately €1.1 billion in gross gaming revenue (GGR).  

While total stakes increased 4% from 2023, industry figures remain 15% below pre-2021 levels, following the introduction of a 5.3% turnover tax. The tax has been widely criticized by operators, who argue it hampers competition and pushes customers toward illegal markets.  

Industry representatives also pushed back against Germany’s gambling regulator, the Gemeinsame Glücksspielbehörde der Länder (GGL), accusing it of underestimating the scale of the black market.  

“We have an increasing black market problem in Germany,” Dahms said. “We are quite sure the [black market] estimates of the GGL are far too low.”  

The GGL's 2023 report estimated that illegal gambling accounts for just 4% of total gambling revenue, including land-based, online slots, and sports betting. However, DOCV Vice President Simon Priglinger-Simader countered that illegal online gambling alone could account for 20% of the market.  

The 5.3% turnover tax on stakes remains a key issue, with industry figures arguing it makes the regulated market unviable and drives both players and operators away.  

Quermann said: “We are paying on the basis of stakes, which for slot games is not the right basis to tax these products.”  

He warned that unless changes are made, the regulated market will continue to struggle: “It’s really hard to survive [in the German gambling market] to be honest. And if we do not come to [a new] conclusion together—operators, regulators, and politicians—it is not a viable market at the moment.”  

Industry leaders urged the government and regulators to engage in deeper discussions to revise taxation policies and combat black market growth.  

Dahms added: “We have to intensify our talks with politicians and the authority on these problems we’ve already described. Otherwise, customers will continue to leave the regulated market, and operators will withdraw themselves from the market.”