Long perceived as a market constrained by strict regulations, the German online gambling ecosystem is currently undergoing a quiet transformation. Behind some of the most demanding rules in Europe, growth is very real.
Unexpected growth under close scrutiny
For years, the consensus was that heavily regulating online gambling would slow its development. However, recent data contradicts this assumption. According to analyses reported by Blask, Germany is now one of the growth drivers of the online gaming sector in Europe, while also hosting the largest number of active brands. Where some predicted a flight to illegality or a decline in supply, what we are seeing instead is a redistribution of players within a highly regulated legal framework.
As Michael Schmitt explains on LinkedIn:
“This fact alone should prompt policymakers to pause for thought. For years, it was claimed that strict regulation would stifle the market. On the contrary, the industry has reorganized itself.”
At the heart of this change is the supervisory authority, the Gemeinsame Glücksspielbehörde der Länder, responsible for enforcing the interregional treaty on gambling.
Unlike other European jurisdictions, Germany has opted for a particularly structured approach: deposit limits, advertising restrictions, payment controls, and high technical requirements. All of these mechanisms directly influence the profitability and organization of operators.
Companies can no longer rely solely on rapid player acquisition; they must integrate compliance costs as a central element of their business model.
Solid growth or fragmented market?
The increase in the number of active brands can be interpreted in two ways. On the one hand, it reflects an attractive and dynamic market. On the other hand, it raises a risk: that of intense competition between operators with reduced margins.
An overly fragmented market can undermine the investments necessary for regulatory compliance, which are essential in such a demanding environment. Without sufficient resources, some players may struggle to maintain the required standards, turning growth into a factor of instability.
“Growth without stability very quickly becomes volatile.”
A testing ground for technology providers
While operators are facing a real regulatory stress test, technology providers see this as an opportunity of a completely different nature. Companies such as Sportradar and Kambi view the German market as a valuable source of liquidity and large-scale data. In a highly controlled environment, flows are better tracked, behavior can be analyzed, and technical standards are standardized.
The market thus becomes not only a commercial space, but also a technological laboratory for the entire European industry.
A model observed throughout Europe
The stakes extend far beyond Germany’s borders. What is at play today could influence the future of online gambling regulation across the continent. If the German model demonstrates that a very strict framework can coexist with measured growth, other countries could take inspiration from it. Conversely, failure would reinforce the arguments of those who warn of the risk of players turning to illegal offerings.
The equation remains delicate. Overly flexible regulation exposes the market to social and financial abuses, while overly burdensome regulation can weaken legal operators in the face of unauthorized competitors. Germany is attempting to navigate this fine line. The proliferation of brands shows that market access remains possible. But regulatory pressure imposes a level of discipline rarely seen elsewhere.
Michael Schmitt:
“There is also a strategic aspect. If Germany proves that a strictly controlled framework can still generate growth, other European regulators will copy certain parts of it. If it fails, the black market argument will regain weight.”
The German experience shows that strict regulation does not necessarily mean economic slowdown, but that it profoundly changes the rules of the game. Between opportunities for structured growth and risks of fragmentation, the country is now establishing itself as a full-scale test for the future of the European market. The next adjustments will determine whether this model can be sustained over time—and, above all, whether it will become the template for regulatory policies across the continent.
The situation in Belgium
Like its neighbor, Belgium chose early on to strictly regulate online gambling in order to protect players and combat illegal offerings. However, the Belgian approach is based on a historically more restrictive system in terms of licenses and the number of authorized operators. Market control is ensured by the Gaming Commission, which applies a rigorous selection policy for operators and severely restricts market access. Whereas Germany has seen the emergence of a large number of licensed brands, Belgium has favored a more concentrated ecosystem, with operators backed by existing physical establishments.
This difference has contrasting economic effects. The Belgian model promotes stability and more direct oversight, but offers less volume and economies of scale. Conversely, the German market, which is larger and more open in terms of the number of licenses, generates more data, technological innovation, and competition, while requiring a much heavier regulatory apparatus.
In reality, both countries are pursuing the same goal—channeling players toward legal and responsible offerings—but embody two possible paths to achieve it. Belgium exemplifies tight and cautious regulation, while Germany is experimenting with large-scale systemic regulation. For European observers, this coexistence offers a valuable contrast.