Casino Gambling as part of the German Gambling Market

In Germany the gambling market is highly regulated. Legislative power lies with the 16 federal states. Only state-operated or state-licensed games are legal. Exemptions are amusement machines with limited money prizes in pubs and arcades (AWPs) and horse race betting. These are covered by federal law.

Gross market volume (turnover) of legal gambling amounted to some € 25 billion in 2011. The biggest market share goes to AWPs followed by the lotto pool. Casino gambling holds third rank. Over the past sixty years, gross gambling revenues of the German casino industry have increased continuously until 2001. Since then revenues have eroded dramatically. Reasons for this are the poor growth of disposable income during the past decade, the increasing competition through internet casino offers from abroad and since 2008 rather tough new regulations introduced by an interstate-treaty on gambling.

Casinos are operated in each German state. Their customers of casinos can be characterized in the following way: men attend more often than women, singles, civil servants and elderlies gamble relatively often, unemployed and blue collar workers are rare customers;. Attendance increases with higher education. Customers with a migration background visit twice as often as their share of the total population. Empirical studies prove that regular gamblers are responsible for some 60 - 80% of gross stakes.

What can be expected from the future is a rising share of revenue from slot machines and an increasing competition through international online offers and sports betting. All in all, perspectives for the industry are not bright at all.

Lothar HÜBL
is professor emeritus of economics at the Leibniz University at Hannover. He specializes in casino and sports markets.