The promises and challenges of a regulated Germany20th May 2021 8:43 am GMT
Aspire Global’s chief business development officer Paul Myatt explores the possibilities of the newly regulated German market as well as its impact on the wider industry
This is the start of a new era of gambling regulation in Germany. After sports betting, the federal states are now further regulating online casino to finally control the market. This will mean that consumers will benefit from clarity and security. Meanwhile, providers with a state seal of approval must meet a high standard of consumer and youth protection, including gambling addiction and fraud prevention. But it is still a new market, so what can we expect?
As with any move towards regulation, this inevitably means a reduction in profit in the short to medium term, but in the long term it will pay dividends. However, the decision to tax turnover will only add more pressure to margins and greater scrutiny into business performance when the market eventually opens for good in the summer. Understanding the region, as well as being flexible to market needs, will be crucial to success in Germany. The high tax rates and strict responsible gambling measures provide many challenges, but there are, of course, measures to help mitigate such risks.
At Aspire Global, for example, when it comes to sports, we allow operators to choose a dedicated odds configuration in order to tackle the market in a unique way, as well as provide automated risk tools that will disable money leakage to problem players.
The unique engagement tools we offer are equally important to help operators attract and retain new customers. Free-to-play products and sports betting tournaments, which are proven retention features across multiple regulated markets, can help to elevate an operator’s offering and ensure players keep coming back for more. With a variety of new sites available for customers to choose from, brands will need to take their proposition to the next level in order to ensure stickiness to their product. Ultimately, those that are versatile will prevail.
Despite choppy waters ahead for some, Germany still presents us with a huge opportunity and is well worth the investment. Sports betting, for one, is absolutely massive in Germany and it is great to see licences being granted. Our sportsbook platform will be ready to serve operators looking for a sports betting licence in Germany and who are seeking the perfect partner to ensure a smooth overall entry.
Another popular vertical in Germany is casino games, yet there is a constant need for operators to differentiate themselves due to market saturation. In this case, operators would be well advised to seek out exclusive and local games that will be appealing to active players, but also provide the best opportunity to drive revenues. Given the strong casino heritage in existence, recognised games from the land-based sector will be an important part of the online offering, ensuring it is appealing to a wide audience.
Aspire Global’s Pariplay, while being one of the industry’s leading aggregators, is also a games studio in its own right and we have seen this localisation approach work for a number of operators in regulated markets. This is arguably the great advantage of regulated markets, they drive innovation and differentiation.
Choosing the right platform
Going into regulated markets means huge costs associated for operators and having a gaming PAM (Player Account Management) that is tailored to that specific region brings with it some massive advantages. They can rest easy, knowing the back-end technology is robust and scalable enough to deal with an influx of new customers.
Above all else, experience in operating within regulated markets will be vital in Germany and will provide a much-needed competitive edge. Competition between new entrants will be fierce, so having the right platform in place that can meet the huge demands of a regulated framework will be key.
Taking a platform into a regulated market has become a speciality for Aspire Global. We can provide our gaming platform solution, AspireCore, for operators looking to enter the newly regulated market. Our platform is approved to operate in 22 regulated markets, including other European countries like the UK, Denmark, Portugal, and Ireland, so, we are well equipped to deliver in Germany too.
This is even more important considering the country’s sheer potential. Should Germany progress in the right direction, and it shows every sign of doing so, it could even become the new regulated gambling capital of Europe, displacing the UK. Demographically, they are quite similar with respect to disposable income, internet penetration and mobile use, but with its 83 million people to the UK’s 65 million, it certainly has the numerical advantage.
The country does seem to have learned a lot of important lessons by looking to other regulated markets in Europe, Sweden for example. Germany has identified a lot of those pitfalls, as well as a lot of the things different markets have gotten right, and is now geared up to become a top performer.