Dubious Sources, Questionable Methodology: Market Figures of DHS and the University of Bremen Still Wrong

June 20, 2023 | Government

GERMANY (June 16, 2023) — In the “Jahrbuch Sucht 2023” (Yearbook on Addiction 2023) published by the Deutsche Hauptstelle für Suchtfragen (DHS), incorrect figures were presented on the size of the sports betting market in Germany. Originally, the DHS stated the turnover for 2021 at 18.3 billion euros, which was supposed to represent an increase of 409.6%. In fact, however, wagers in 2021 amounted to 9.4 billion euros, which represents an increase of 21% compared to the previous year. Although the German Sports Betting Association (DSWV) has pointed out the errors and provided the correct method of calculation, the DHS still uses the incorrect revenue figure of 18.257 billion euros in the revised version of the article “2.4 Gambling – Facts and Figures” in the Addiction Yearbook 2023 (see Table 1, p. 92).The responsible author, Prof. Dr. Gerhard Meyer from the “Health & Society” department of the Institute for Public Health and Nursing Research at the University of Bremen, calculated the figure based on a gross gaming revenue of 1.3 billion euros and an alleged payout ratio of 93% for sports betting providers. He drew this rate from “available comparisons” (see Tab. 1, p. 92). Unfortunately, the sources for the comparisons are not given in the article in the study itself, but are given in the note for correction that appeared on the DHS homepage. However, the sources for these comparisons (fussballwetten.com, sportwettentest.net, wettanbieter.de) are questionable and not suitable for a scientific study:

    • The website fussballwetten.com has an incomplete imprint, the person responsible for the page or the company behind it cannot be determined. A closer look at the site also reveals an assumption as to why the imprint is incomplete: the site advertises gambling that is illegal in Germany. Of the “TOP 10 betting providers” recommended there, not a single one has a permit in Germany. According to the website, bookmakers could also offer bets legally and safely with licenses from Curaçao. This does not apply to Germany and such a statement puts the axe to any efforts to create a legal and secure sports betting market in Germany.

    • The author of the two other websites (sportwettentest.net, wettanbieter.de) is only given the first name “Heinz”. His statements on the payout ratios (i.e. the proportion of the stake that a betting provider pays out to its customers as profit) are very abbreviated. These vary from provider to provider and from bet to bet. They are determined by a number of factors – such as the intensity of competition, the tax burden, the cost structure and the risk appetite of a bookmaker, as well as the gaming behavior of its customers. For example, there are large differences between the online market (tending to have higher payouts) and betting stores (tending to have lower payouts). A bookmaker whose customers predominantly play combination bets tends to have a lower payout than a bookmaker who receives many single bets. The payout ratios can vary from month to month even with the same provider. In any case, the payout ratio of 93% stated by “Heinz” and adopted by Prof. Meyer in his calculation is not a realistic average payout ratio to be assumed (especially considering the high tax burden of 5.3% on each bet in Germany).

It is regrettable that at the Bremen Institute for Public Health and Nursing Research, which claims to conduct gambling research, sources such as ‘Heinz from the Internet’ are used as the basis of scientific work.In this context, the cash-based tax revenues published monthly by the Federal Ministry of Finance and the well-known betting tax of 5.3% on each bet placed provide a reliable basis for calculation that is comprehensible to everyone and delivers a secure result on the size of the legal sports betting market in Germany.

The Joint Gaming Authority of the Federal States (GGL) also confirmed this metric in its press release of March 16, 2023, expressing that 95% of the reported tax payments come from regulated operators.

Accordingly, the cumulative wagers amounted to 9.4 billion euros in 2021. DSWV explained this accounting path in the first request for correction to DHS and Prof. Dr. Meyer.

The German Sports Betting Association therefore again demands a correction and correction by the DHS and Prof. Dr. Meyer.

Perhaps already as a hint for the preparation for the new Yearbook Addiction: In 2022, the betting stakes of sports betting providers fell to 8.2 billion euros (-13%) according to the published figures of the Federal Ministry of Finance.

SOURCE: Deutscher Sportwettenverband

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