Germany’s gambling regulatory framework is facing fresh pressure to reform as the long-awaited review of the 2021 State Treaty approaches completion. A proposal from the Economic Council, a think tank with close ties to the CDU, is pushing policymakers to reconsider the current structure, arguing that the market has failed to deliver on its original promise.

The Regulatory Squeeze

Five years into the reformed regime, Germany’s licensed operators continue to operate under constraints that many believe undermine market competitiveness. The 5.3% levy on online slot stakes (rather than gross gaming revenue) remains a point of contention, as does the €1 maximum stake limit per spin. These restrictions were designed to encourage responsible play, but critics argue they’ve simply pushed players toward unlicensed alternatives.

The numbers tell a sobering story. Illegal betting sites outnumber authorised providers by roughly eleven to one, according to the German Sports Betting Association. Channelisation rates hover between 22% and 25%, with forecasts suggesting further decline to around 20% by 2030. These figures underscore a fundamental problem: the regulated market is struggling to attract players away from offshore operators.

A Rebalancing Act

The Economic Council’s intervention centres on a simple argument: Germany has overcorrected on player protection at the expense of market viability. The proposal calls for reconsidering how heavily the treaty weights consumer safeguards against the legitimate needs of licensed operators and adult consumers who wish to access regulated products.

Several concrete recommendations emerge from the analysis:

  • Introducing continuous independent research rather than relying on periodic reviews, so regulators can adjust policy in real time
  • Simplifying licensing procedures and streamlining the fragmented product approval process
  • Shifting enforcement focus toward attacking illegal operators rather than tightening rules on licensed providers

The Broader Picture

This intervention reflects growing frustration across multiple stakeholder groups. The European Gaming and Betting Association has previously questioned whether the current structure can realistically channel players into regulated channels. Domestic operators have been making similar arguments for months.

With the treaty review expected to conclude before year-end, policymakers face a critical choice: maintain the status quo and accept ongoing market fragmentation, or acknowledge that Germany’s regulatory approach requires meaningful structural adjustment. The debate is no longer about whether change is needed. It’s about what form it should take.