Germany’s Legal iGaming Market Fighting Against Unlicensed Operators

The illegal gaming machine market in Germany is growing rapidly and could surpass the number of legal machines by 2026, according to a study by DICE Consult commissioned by the trade association VDAI.

Market Overview and Study Findings

The study analyzed market trends following the implementation of inter-state gambling treaties in 2012.

In 2022, Germany had 137,383 legal gaming machines — a sharp decline from 211,887 in 2016. Other market analyses estimated the total number of machines, including unlicensed ones, at around 180,000.

According to DICE Consult:

• Between 58,336 and 116,672 illegal machines were active, mainly in urban “coffee shops.”

• By 2026, the total number of gaming machines is projected to reach 250,000.

• Illegal machines could make up 45–62% of the total market.

This trajectory indicates that illegal operations may overtake the legal sector as early as next year.

Regulatory and Market Challenges

Germany’s inter-state gambling agreement, which regulates gaming in pubs and arcades, has undergone multiple revisions since 2012. These frequent adjustments have:

• Made compliance more complex for licensed operators.

• Reduced the attractiveness of the legal market.

• Pushed players toward illegal venues that disregard safety and fairness standards.

The Working Group Against Gambling Addiction warns that legal gaming must remain appealing to counteract illegal alternatives, which often lure customers with fewer restrictions.

Industry and Enforcement Responses

Georg Stecker, CEO of DAW, has called for:

• Stronger enforcement against unlicensed operators.

• More competitive conditions for the legal market.

• Better incentives for compliance and responsible operation.

A Der Spiegel report echoed these concerns, portraying the legitimate industry as struggling against a rapidly expanding black market.

The article detailed how:

• Decommissioned gaming machines are reprogrammed with banned software by companies in Eastern Europe.

• Thousands of illegal arcades disguised as cafes and bistros operate across Germany.

• These generate an estimated €3–6 billion ($3.22–6.44 billion USD) in tax-free revenue each year.

The continued rise of illegal gaming operations underscores the urgent need for stronger regulation, effective enforcement, and a more attractive legal market to ensure fairness, safety, and state revenue integrity.