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Deutsche Sportwettenverband (DSWV), the German association of sports betting providers, has called on the German government to restart the stalled sportsbook licensing process after the country’s sports betting sector saw sales fall 16.1% in 2020 following the disruption caused by Covid-19.

DSWV president Mathias Dahms also warned that the strict controls for the online casino had already prompted a mass migration of players to unlicensed sites, and urged a rethink on how the vertical is regulated.

Tax figures from the Federal Ministry of Finance reveal that industry turnover declined from 2019’s record €9.3bn to €7.8bn (£6.9bn/$9.4bn). Tax revenue for the year fell 16.2% year-on-year to €389m.

The industry association noted that if January and February’s figures were taken out, to cover the impact of Covid-19 from March onwards, turnover would have been down more than 20% compared to the prior year.

In April and May, DSWV president Dahms noted, the market “collapsed completely.” With betting shops closed and sporting events suspended, turnover plummeted 90% year-on-year for April, then fell 75% in May.

Amid accusations that the gambling industry was profiting from the crisis, Dahms said, “the exact opposite is true.”

It was only in late summer, when the sporting calendar was packed as postponed events took place, that staking stabilised, the DSWV explained. The economic situation, however, remained “extremely tense,” it added.

“During the current lockdown, all 5,000 to 6,000 betting shops nationwide are closed or have been [offering a reduced service]. Approximately 25,000 employees are mostly on short-time work and in fear for their jobs, while the operators fear for their businesses’ futures,” Dahms explained.

He said that with betting shops denied state aid, the government must set out a roadmap towards reopening, including the social distancing and sanitisation measures required of operators.

This financial crisis, the DSWV continued, had been exacerbated by the transitional regulations for online casino that came into force as of 15 October. This has been followed by “massive” migration of consumers to black market operators, mostly based in Asia and the Caribbean.

A survey of DSWV members claims each operator has seen igaming turnover fall by an average of 54% in the wake of the transitional regime beginning. This requires operators to cap online slot stakes at €1 per spin, with spin speeds to average 5 seconds.

“It is clear that the strict regulations for virtual slot machines have channeled the market away almost overnight – unfortunately in the wrong direction. It is unrealistic to believe that German customers will get used to the excessive restrictions of the State Treaty and come back to licensed providers as long as they can play with competitors who offer them much better conditions,” Dahms said.

“We urgently need improvements to the regulations and a functioning enforcement against illegal offers. Otherwise, established providers willing to regulate will withdraw from the German gaming market,” Dahms added.

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