Admiral withdraws from German retail betting market

12 May 2020

Admiral Sportwetten, a brand operated by Novomatic subsidiary Löwen Entertainment, has announced that it will withdraw from the German retail betting market, blaming years of regulatory stasis for the move.

The business’ 17 Admiral-branded licensed betting offices have been closed since mid-March as a result of novel coronavirus (Covid-19), but will now not reopen once the lockdown is eased. Sales have fallen by more than 95% since the shops were closed, and sporting events suspended, it noted.

However it was the failure of efforts to regulate sports betting, rather than Covid-19, that resulted in the decision to pull out of the market, the operator explained.

“Our withdrawal is the sad result of the failure of German gambling regulation,” Admiral Sportwetten managing director Oliver Bagus said. “In particular, as a private sports betting operator, we were at a massive disadvantage from the start. The Covid-19 crisis further exacerbated this inequality.

“The regulatory framework destroyed the business case for the future-proof and legally secure continued operation of the Admiral betting shops in Germany.”

He said its employees would be offered new roles in its sister business, the gaming hall chain Admiral Entertainment.

Admiral had initially hoped to be one of the online betting operators licensed under the third State Treaty on Gambling, which came into force in 2012. In 2014, when the market was to be limited to 20 concessionaires, it had looked set to be awarded one of the licences.

However the process was then derailed by legal challenges from those not awarded a licence. Admiral only launched in Germany in late 2017, after being given assurances that it would be allowed to operate by state authorities.

It had then aimed to enter through the third amended Treaty, which came into force in January this year. However that process was then derailed by a legal challenge brought by Austrian bookmaker Vierklee.

“The third amended State Treaty on Gambling should have finally removed the regulatory blockage,” Löwen Entertainment board member Dr Daniel Henzgen said. “Instead the goal of bringing sports betting into the legal market once again died in court.

“After more than eight years, we are still lacking legal certainty, and above all, a fair playing field.”

This, Henzgen said, was due to failure of the German authorities to treat gambling as a mass market entertainment product.

“This means there is no consistent regulation geared towards the goals of protecting players and the minors, combatting crime and allowing consumers to gamble safely, thus laying the foundation for entrepreneurial investment and jobs in Germany.

"This regulatory approach is pushing consumers to illegal operators, and creating illegal business for the illegal providers at our expense,” he added. “The closure of our sports betting shops is only the latest indication of the ongoing failure of German gambling regulation.”