Sometimes, it doesn’t necessarily pay to be right. The Düsseldorf Institute for Competition Economics asserted last month that Germany’s proposed tax structure for online gambling activity could lead to more gamblers turning to illegal or offshore sites and it seems that’s already happening in a big way. Sports gambling, in particular, is watching a transitional move toward the alternative options, propelled by new, controversial regulations and a massive halt in sports last year because of COVID-19.

Germany’s legal sports gambling market saw revenues last year of €7.8 billion ($9.45 billion), according to the country’s Federal Ministry of Finance. This was 16% below what had been seen a year earlier, when the market recorded €9.3 billion ($11.27 billion). The period from March to May was the worst, corresponding to the time that the world essentially shut down sports activity everywhere, but began to pick up in June. Since September, sports gambling revenue in the country has continued to perform better, but it is still much lower than it was a year earlier.

As a result of the downturn, sports gambling operators couldn’t contribute as much to the government’s coffers as they had a year earlier. In 2019, they gave €464 million ($562.7 million), but this dropped to €389 million ($471.78 million) last year. However, despite the drop, some believe the German Sports Betting Association (DSWV, for its German acronym) profited from the pandemic, an assertion the organization emphatically denies.

According to DSWV President Mathias Dahms, “The exact opposite is true. During the first lockdown in spring 2020, when all European leagues had ceased their gaming operations, the German sports betting market collapsed completely: in April by 90 percent compared to the previous year, in May by 75 percent. Without sport there can be no sports bet, of course.”