Economic Development of the German Coinoperated Gaming and Amusement Machine Industry 2016 and Outlook for 2017

Tasks

The project is the latest analysis of the economic situation and outlook for commercial gaming in Germany annually conducted by ifo for the trade assocation since the early 1990s. The current study focuses on the impact of the regulation of the German gaming and gambling market on amusement arcades, and particularly on the provisions that will take effect as of 1 July 2017. These requirements could trigger a reduction of over 50% of the installed capacities. Rulings by the Federal Administrative Court (BVerwG) and the Federal Constitutional Court (BVerfG) on 16 December 2016 and 7 March 2017 respectively, paved the way for these requirements taking effect.

Methods

Literature Research:

• Assessment of studies on the societal acceptance of leisure time activities and changes in social values;
• Evaluation of sociological studies on the behaviour of different groups of gamers, leisure time-, problematic- and pathological gamers;
• Assessment of relevant judgements and decisions by Federal and States courts, as well as jurisprudential studies with regard to their impact on the amusement arcade industry.

Interviews:

• Survey among operators on their economic situation and perspectives, as well as their assessment of the expected impact of upcoming changes in the framework conditions on amusement arcades.

Data and other sources

Federal Statistical Bureau (Statistisches Bundesamt); Statistics of the Working Group against Gambling Addiction (Arbeitskreis gegen Spielsucht e.V.), the ifH-Institute for Commercial Research (ifH-Institut für Handelsforschung GmbH) and international empirical studies with quantitative results on gamers' behaviour; internal statistics of the German Industry Association of Coinoperated Amusement and Vending Machines (Verband der Deutschen Automatenindustrie e.V., VDAI).

Results

On 1 July 2017 the transition period for the essential provisions of the Inter-State Treaty on Gambling of 2012 (GlüStV 2012) and the state-specific regulations threatening the existence of the industry will expire. Their taking effect could cause a reduction of the industry's current number of employees from 70,000 down to between 30,000 and 35,000.

The reduction of the capacities is not expected to take place abruptly, although the Federal Constitutional Court ruled that, in principle, the provisions are in accordance with the Constitution. However, the competent authorities have to take into account the basic rights of the owners of those amusement arcades that they envisage shutting down. Operators concerned by these decisions will - in large numbers - seize the competent courts to clarify if the procedures applied by the authorities conform with the Constitution. The courts will not be able to pass final judgements within one year's time because of the complexity of the legal object and the high level of protection of Fundamental Rights.