Due to various factors, including the harmful influence of the pandemic and countless regulations connected with it, the German gambling market has been unstable for a long time. Nowadays, the industry is going back to its normal state.
The Conditions of the German Market
In 2021, the businesses that operate in Germany slowly but surely started recovering from the effect that the pandemic had on their functioning. The revenue rose by 4% compared to 2019. The trend of online operations has become prevalent compared to in-person gambling, with internet establishments bringing in the majority of income.
In case it continues this way, digitalisation can completely take over the market. However, there are still some limitations among German players regarding the amount of money they can spend. One of the biggest issues in the industry is how to reach a large number of players instead of remaining a niche business.
Historically, Germans have been more driven to gambling than sports wagering. Apart from the locals who were born in the country and lived there for their entire life, there are also a lot of immigrants that also tend to play a lot. Before the pandemic, Germany was one of the most successful countries when it came to gaming market revenue, and the most effective types of this activity were slot machines and other casino entertainments.
Risks
There are a few risky moments when it comes to customer-related services on the country’s market. First of all, a lot of men, ranging from young to middle-aged, put their efforts into becoming omnichannel players. Therefore, they do not go to gambling establishments anymore, and strict coronavirus policies are not helping the situation.
Another risk is based on the regulations that circulate around the online type of gambling on the domestic market. The slot and poker games are loved by many players, and a big part of them is wagering low stakes. These industries are stable in terms of revenue, and the earnings they bring to the country can be compared to its United Kingdom analogues. Still, the high level of taxation makes the market less appealing than its foreign counterparts.
In order to take the situation with taxes under control, the regulators will have to consider introducing a new regime that could cover these expenses. However, it can be a difficult thing to implement considering that taxes directly benefit the government, as opposed to revenue from gambling activities. The regulators will need to pay attention to some of the most pressing financial issues.
Problems
The profits received from the online market in Germany is currently 14% of the size of the land-based industry in the state before the pandemic. In the scenario of its growth, it could eventually become an issue for the country’s gaming business. In comparison, other countries, such as Denmark and the United Kingdom, have the income from both markets more balanced.
The German market is still going to be seen as lucrative if the regulators can instil a certain pattern in the way it functions. The omnichannel strategies will need to be adopted in the slot business, otherwise, the income could be obtained by betting companies that are more efficient at creating and selling customer-directed products and services.
Combining a money-based economic model and certain regulations may make the situation progress a little slower. Yet, it can be balanced by the necessity of companies that focus on betting to influence the development of niche products into more widespread ones. They will be able to use sports events to promote wagering, even though this approach can be controversial at times.
Conclusion
Certain parts of the world, like France, have made some strategic mistakes in their market development, especially regarding investing in the online industry. Since one of the best German operators, Tipico, has already established its reign in Europe, it will have an opportunity to avoid this miscalculation.
Still, it is hard to say for sure which sides will profit or lose from the market’s current state. Even though German regulations can do more harm than good to the operators, in the long run, they will have to learn how to work with them.
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