If there is one key term that comes up in connection with the evaluation of the State Treaty on Gaming in 2026, it is channeling. Hardly any other indicator has such a direct bearing on whether German gambling regulation is considered a success or in need of correction. While the term is omnipresent in political debates and industry statements, its methodological derivation often remains difficult for outsiders to grasp.

At its core, channeling describes the regulatory goal of directing the natural demand of the population into the regulated market. The greater the proportion of gambling activity that takes place with licensed, monitored, and taxed providers, the more effective the regulation is considered to be. Conversely, a high proportion of unlicensed offerings is seen as an indication that the system is not fully fulfilling its control function.

Why channeling forms the basis of regulation

Gambling is an addictive commodity that is in demand regardless of bans. The central question of regulation is therefore not whether gambling takes place, but under what conditions it does so. A state protection system can only deploy its mechanisms where users operate on legal platforms. As soon as players switch to offshore offers, they escape the reach of supervision.

Channeling is therefore not purely an economic parameter, but a prerequisite for achieving all other objectives of § 1 GlüStV 2021. Measures such as the cross-provider deposit limit (LUGAS), the central blocking system (OASIS), and identity verification only take effect within the channeled market.

The legal basis

The State Treaty on Gaming explicitly names channeling as one of its primary objectives. The legislator has deliberately opted against a total ban and in favor of a controlled, legal offering. The 2026 evaluation will objectively examine whether the framework conditions set are sufficient to achieve this steering objective or whether the regulatory hurdles encourage migration.

Methodology: How is channeling measured?

Measuring the channeling rate is complex because the illegal market naturally does not provide any official reports. The evaluation is therefore based on a bundle of direct and indirect data sources:

• LUGAS data: Evaluation of actual bets placed and active accounts in the legal online market.
• Tax statistics: Comparison of reported sales with expected values from market forecasts.
• Web traffic analyses: Measurement of visitor flows on legal versus illegal platforms (including via panel data from market research institutes).
• Payment flow analyses: Findings from payment blocking and cooperation with financial service providers. Scientific prevalence studies: Surveys on gaming behavior that also anonymously record the use of unlicensed offers.

These parameters are used to calculate a channeling rate that reflects the share of legal gaming volume in the overall market.

The tension between restriction and attractiveness

A key aspect of the evaluation is the recognition that channeling is also a result of market acceptance. Players choose a platform based on factors such as game selection, speed of payout, bonus offers, and technical stability.

The 2026 evaluation must examine how regulatory interventions—such as betting limits, the five-second rule for virtual slot machines, or advertising restrictions—affect channeling. The aim is to find a system that offers maximum security without reducing the attractiveness of the legal offering to such an extent that users deliberately switch to the unregulated sector.

International comparative perspective

Germany is not alone in facing this challenge. The evaluation therefore also draws on experiences from other European markets. Countries such as Denmark and Sweden, which introduced similar licensing systems earlier, serve as reference points. Their channeling rates are used to assess the effectiveness of the German model in an international context.

Conclusion

Channeling is the linchpin of the 2026 evaluation. It is the link between economic reality and the regulatory mandate to protect consumers. Whether German regulation is considered viable in the long term depends on whether it succeeds in keeping the majority of gamblers within the controlled space on a permanent basis.

Read the first part of our series on the evaluation of the State Treaty on Gaming here.