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Does Germany Have a Chance of Success in the Online Space

1. Prerequisites for the Legalisation of Virtual Gambling

2. Conditions for Transition to the Legal Online Environment

3. Advantages and Disadvantages of the Legalisation Process

4. Future Expectations 

5. Conclusion

If you are interested in the development of the gambling business in Europe, you probably know that German operators have been seeking permission to work in the online environment for a very long time.

In the past few years, several necessary steps have been taken to help the gaming industry enter the online market. In early 2020, the government launched the process of legalising virtual projects. However, it has both advantages and disadvantages.

The 2WinPower team decided to analyse this situation and study the opinions of experts regarding recent changes in German gaming law. Find out whether the operators have a chance to break into the local online market.

Prerequisites for the Legalisation of Virtual Gambling

Prerequisites for the legalization of virtual gambling

Ground-based gambling projects are quite common in Germany. Until recently, offline bet-shops have brought good profits to their owner. Nevertheless, virtual platforms have become incredibly popular nowadays. The up-to-date format of work has become more promising than a land-based business. At the same time, the local government has long denied this fact.

Experienced businessmen and highly qualified lawyers have come together to deal with the prevailing circumstances. This fight has been going on for 15 years. Entrepreneurs managed to achieve many positive changes during this period. The creation of a state treaty and the start of the legalising process is the primary evidence of the effectiveness of this struggle.

Almost all operators, providing online services, operate in the grey business segment today. Their main requirement is access to the legal market. It will allow companies to win the trust of players and gain an excellent reputation. Moreover, such conditions will provoke the appearance of healthy competition and stop the state monopoly.

At the same time, gamers will receive a more extensive selection of safe and reliable Internet resources. In turn, the state will have the opportunity to replenish the budget through taxation of the gaming industry.

The main goals of online business legalising are as follows:

  • issuing licenses to operators;
  • study of the virtual market effectiveness;
  • customer protection;
  • fighting gambling addiction.

Conditions for Transition to the Legal Online Environment

Transition to the legal online environment

It may seem that the last changes in the legislation are an extremely positive phenomenon. However, they have several significant drawbacks. This fact forced many operators to delay the transition to the online environment.

The fact is that the process of issuing licenses for online entrepreneurs is a short-term experiment. The authorities want to explore the peculiarities of the virtual market and make sure that the demand for online services is really high. It is not known whether the issued permits will be extended.

To get permission, operators need to collect a large package of documentation and spend substantial sums. Many businessmen claim that they are not ready to risk huge amounts without being confident in the prospects.

Besides, the government introduced several restrictions that may affect the successful development of business projects. According to official statements, these restrictions were implemented at the request of medical organizations to combat gambling addiction.

Thus, owners of online casinos and betting websites are not allowed to advertise their products in the daytime. In addition, there are many severe financial constraints.

Advantages and Disadvantages of the Legalisation Process

Updated legislation opens up many opportunities for operators. At the same time, it has some controversial issues. In addition to the aforementioned imperfections, experts identify several other significant shortcomings.

Advantages

Disadvantages

The legalisation of virtual activities. Operators got the opportunity to work within the framework of the law. Entrepreneurs hope that obtaining licenses will give them confidence in the prospects for the future development of their projects

The lack of control over the shadow and black markets. The government did not provide any tools for controlling the activities of the shadow and underground business

The fight against gambling addiction. According to representatives of the authorities, monitoring legal business is an effective means of combating ludomania. Besides, such an approach will reduce the number of minor players

Restrictions, provoking the opposite effect. The uncontrollability of the grey and black markets will lead to a sharp surge in gambling addiction and a massive influx of juvenile gamblers

Gaining audience trust. Legal activities guarantee an increase in the loyalty of the audience. Players want to be confident in their safety

Limited opportunities for business promotion. For example, businessmen are allowed to advertise their projects on the Internet only at strictly time

Future Expectations 

Despite the strict limitations and the absence of guarantees, many experts consider the legalisation of online gambling in Germany a big step forward. Lawyers and representatives of the gaming industry suggest that local legislation will continue to change gradually. 

This process can be quite lengthy. However, German operators should not give up.

Let us consider the expected results of the legalisation:

  1. Extension of the process of transition to the legal online space. Experts believe that the current experiment should lead to the full legalising of the virtual gambling business.
  2. Creating a competitive environment. Entering a large number of companies into the online market will contribute to the creation of healthy competition and the growth of consumer interest.
  3. The development of tools to control underground establishments. Businessmen expect stricter control over black market representatives. The ban on illegal establishments will allow conscientious entrepreneurs to increase their profits and the trust of gamblers.

Conclusion

Changes in German gaming law

Germany has managed to make a breakthrough in the gaming industry.

Current legislative changes can be described as follows:

  • opportunity to obtain official permission to work in the virtual gambling field;
  • quite stringent requirements for candidates;
  • the absence of instruments to regulate grey and black markets;
  • the lack of information on license renewal prospects.

If you decided to launch your project in Germany, you should think about cooperating with a reliable and experienced partner. The purchase of a turnkey online casino from 2WinPower will let you start a successful business in the shortest possible time.

Do you want to learn more about this service or explore the specifics of updated German gambling legislation? Please, contact our manager to get the answers:

Posted by

Andrew Price

2WinPower Partner, owner of the gambling establishments network.

11/05/2020

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