German municipalities are forging partnerships with licensed arcade operators in a bid to diminish the presence of illegal gambling establishments. A collaborative discussion document, previously shared with FAZ, highlights this joint effort between the German Association of Cities and Municipalities (DStGB) and the overarching association representing the German slot machine sector. The primary objective is to elevate the reputation of arcades and divert potential players from illicit venues. Georg Stecker, spokesperson for the slot machine industry, remarked, "Our joint document seeks to offer constructive strategies for the regulated operation of gambling within cities and towns." The initiative is geared towards mitigating detrimental trends, notably the burgeoning black market and potential constraints on urban planning.

Recent years, especially following the disruptions of the COVID-19 pandemic, have seen escalating pressure on local authorities to address the black market issue. The slot machine industry's estimates suggest that Germany currently houses between 40,000 and 50,000 non-commercial slot machines, often termed 'entertainers' or 'fun games'. This number marks a significant decline from the over 80,000 illicit machines identified in the early 2010s.

A 2023 study by IW Consult, commissioned by the slot machine sector, anticipates a reduction in legally sanctioned slot machines to approximately 180,000 by 2022, down from 264,000 in 2016. Alarmingly, the share of illicit gambling within the stationary sector has surged from 4% in 2012 to an estimated 30-46%, according to IW Consult.

Prioritizing Social Responsibility in Arcades

A cornerstone of the legal arcade framework is the imperative for establishments to uphold the social obligations stipulated in the State Treaty on Gambling. Arcade staff must undergo training to identify problematic behaviors and be proactive in assisting players showing signs of addiction. Protective measures for vulnerable demographics, especially minors, include rigorous player checks against the national Oasis blocking system.

Gerd Landsberg, the managing director of DStGB, expresses optimism about enhanced collaboration among stakeholders: "Municipalities are deeply invested in safeguarding minors from the perils of gambling and escalating the battle against illegal wagering. Continuous dialogue with businesses, law enforcement, and other stakeholders is pivotal in advancing these shared objectives."

Financial Implications for Municipalities

Beyond the ethical considerations, the economic aspect also weighs heavily on municipalities. The entertainment tax, a pivotal revenue source tied to slot games, generated a nationwide sum of 947 million euros in 2019. However, by 2021, this revenue had plummeted by approximately 50%. While factors such as the pandemic-induced lockdowns and the rise of online gambling (sanctioned in Germany's 2021 State Treaty on Gambling) contributed to this decline, the discussion paper also underscores the adverse impact of stringent spatial regulations on legal arcade operations. The document advocates for a nuanced approach, suggesting more adaptable minimum distance regulations while ensuring the highest standards of quality and youth protection.

Addressing the Challenge of Gambling Addiction

Acknowledging the inherent sensitivities associated with gambling, industry representatives emphasize their role in offering a structured avenue for the innate human desire to gamble. They argue that regulated gambling avenues are preferable to the proliferating unregulated 'café casinos' or clandestine gambling dens. Efforts to counteract and monitor potential increases in gambling addiction, as highlighted in a recent gambling atlas by the Institute for Interdisciplinary Addiction and Drug Research and the University of Bremen, are believed to benefit from these enhanced legal frameworks. However, the atlas and its 2021 survey on gambling behaviors have faced criticism for methodological discrepancies. Notably, while a 2019 survey by the Federal Center for Health Education identified around 229,000 Germans with gambling issues, the 2021 findings suggested a staggering 3.25 million individuals engaging in risky gambling behaviors and 1.3 million diagnosed with gambling-related disorders.

Image by Bruno from Pixabay