Germany’s federal gambling regulator, GGL, has issued a firm warning to the public against engaging with token-based social betting platforms and event contract trading platforms such as Polymarket. These platforms, while popular in some regions, remain unlicensed and thus illegal under the Fourth Interstate Gambling Treaty of 2021 in Germany.
The GGL pointed to an alarming increase in media coverage concerning “entertainment-type bets,” particularly those predicting the outcomes of significant non-sporting events like the Ukraine conflict. These types of bets, facilitated by platforms like Polymarket and Kalshi, allow users to engage in predictions about a broad spectrum of events, including political elections and economic changes. In the United States, these activities fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC) as they are considered derivatives rather than traditional bets.
Despite their classification in the US, Germany’s regulator is clear: event contracts are deemed illegal betting activities within its borders. The GGL has highlighted the inherent risks associated with such platforms, noting the unpredictable nature of real-world events that are unrelated to sports. This unpredictability and potential for manipulation mean that these products cannot gain approval under Germany’s legal framework. The GGL emphasized, “Such formats are particularly susceptible to manipulation, as they are often based on unclear, subjective or controllable events. The legislator has only allowed bets on defined sporting events with verifiable results and clear rules as eligible for approval.”
In a related development, Polymarket announced a strategic move back into the US market through its $112 million acquisition of the CFTC-licensed exchange QCEX. This purchase allows Polymarket to operate under QCEX’s licence, offering event contracts as tradable derivatives, thus bypassing some of the legal challenges faced in other jurisdictions.
A broader look at Germany’s gambling landscape reveals crucial statistics provided by the GGL. The regulator recently began releasing quarterly data on the country’s regulated gambling market, including both state-controlled and charitable lotteries and what are described as “transnational high-risk games of chance,” such as online slots and sports betting.
In the first quarter of the year, lottery stakes in Germany amounted to €377 million, with a slight decrease to €371 million in the second quarter. State-controlled class lotteries saw stakes of €61 million and €58 million for the first and second quarters, respectively. Charity lotteries contributed stakes of €315 million in Q1 and €313 million in Q2.
Higher-risk games, particularly online slots, generated substantial revenue, with wagers reaching €1 billion in Q1 and increasing to €1.1 billion in Q2. Online poker stakes were reported at €204 million and €184 million across the two quarters, while online horseracing betting showed €25 million and €32 million, respectively.
However, the most significant vertical in terms of stakes was online sports betting, which registered €1.6 billion in Q1 and €1.4 billion in Q2. Retail sports betting figures were €585 million and €494 million for the same periods. Overall, total sports betting stakes came in at €2.1 billion in Q1 and €1.9 billion in Q2.
In addition, the state of Hesse has provided updates on Germany’s gambling self-exclusion system, OASIS. As of the end of July, four years since its launch, OASIS had facilitated 336,980 registrations. Over the past year, approximately 44,000 individuals have registered each month, with December 2024 marking a peak of 56,844 registrations.
The most common exclusion period chosen by individuals was a full year, while shorter bans of one to two years were also popular. In contrast, only 7,459 people opted for bans lasting between five to ten years, and a mere 22,381 chose exclusions exceeding ten years.
While the GGL’s stringent stance on social betting platforms underscores the country’s commitment to maintaining strict regulatory controls, there are differing perspectives on the matter. Proponents of platforms like Polymarket argue that such systems offer innovative ways to engage with global events, transforming traditional gambling into a more interactive and informed activity. They suggest that with appropriate oversight, these platforms could coexist with established gambling norms, potentially encouraging governmental bodies to reconsider their positions.
Nevertheless, German authorities remain cautious, prioritizing consumer protection and emphasizing the need for clarity and security in betting activities. As the debate continues, the regulatory landscape for gambling in Germany will likely face further scrutiny and adjustments in response to evolving market dynamics and technological advancements.
David Garato is a luminary in gaming journalism, renowned for peeling back the curtain on the gaming world with his witty and insightful commentary. A decade into weaving stories from the pixelated edges of indie games to the expansive universes of AAA titles, David’s work is a thrilling blend of analysis and adventure. When not writing, he’s live-streaming, sharing his gaming exploits with an engaged and growing audience. David doesn’t just write about games; he lives them, making him a trusted guide in the gaming community.
