Germany has re-regulated its gambling industry in a bid to restrict offshore operators’ access and ensure that it achieves better channelization.
However, several years after this fact, the industry and the regulator have been mostly in disagreement on some key points, with the GGL and stakeholders unable to agree on what the exact channelization numbers in the country are and whether the current legislative framework has pushed consumers actively offshore, empowering rogue operators at the expense of regulated entities.
New changes coming to Germany’s regulated gambling market
As these debates rage on, and with a planned review due to be turned in by December 31, 2026, German state ministers have stepped up during the Conference of Interior Ministers this past June, seeking to discussed a proposed Second State Treaty that is meant to introduce further changes to the existing 2021 Interstate Treaty on Gambling (GlüStV) that would potentially strengthen the market’s resilience to offshore incursions, boost the regulator’s powers, and make regulated operators more attractive.
After the GGL was dealt a defeat and ordered to stop issuing IP blocks in certain cases, which added to the difficulty of policing offshore market operators, the new changes proposed by the ministers sought to rectify this situation. Under the proposed changes, the regulator would be able to issue IP blocks and seek to restrict offshore operators’ access to German IPs, although such a measure would still need to be used sparingly.
Commenting on these proposed changes, Casino Guru's Head of Casino Research, Matej Novota, added: "Effective IP blocking in Germany will not improve channelization, because players actively prefer offshore casinos over the licensed market. The logic is simple: the licensed offerings are far less attractive than those from offshore operators. Until this core issue is addressed, no matter how hard the regulator tries to block the offshore market, players will continue to seek out those alternatives."
Still, the regulator would need to jump more hoops as it would need to collaborate through intermediary services, such as an ISP, to enforce a blocking measure. For the most part, IP blocks have been heavily criticized as they could potentially impact legitimate businesses.
A gambling ad that appeared on a website could have been a mistake, for example, but the resulting block could have serious consequences. Overlocking is an issue that has been cited by critics of the measure, while the GGL has maintained that it would use such powers fairly.
The GGL is also going to get a new slice of power, though, and it would also be allowed to tap overseas counterparts about a brand’s or operator’s eligibility based on the overseas homologues’ experience.
Will Germany address its channelization problem?
Closer cooperation with international regulators could be what allows the GGL to be more efficient in not only licensing new companies but also raising red flags over those operators that may be licensed elsewhere but target the local market without permission.
However, a huge issue for most industry observers remains the rate of channelization. About half of all gamblers are said to be playing at offshore companies, independent industry research suggests. The GGL has dismissed those claims, arguing that the methodology used to come up with this number was flawed.
Many of these issues will be discussed at the upcoming Gaming in Germany Conference due on November 11, 2025.
