Lets not get into whether betting in Germany is legal or not, the law is unclear. From what we have witnessed over the past 15 years, betting companies fought the German authorities and won!
Let us tell you the German state tried to stop betting companies and agents procuring bets, but lawyers managed to keep the funnel open. The result, bookmakers, agents and lawyers have all made a fortune by being brave!
HOW THE SYSTEM WORKS IN GERMANY
With regards to the German betting market, the company (bet taker) is set-up in Malta and contracts local agents (Germany) to collect bets on their behalf. The legal situation is covered by having an EU issued betting license.
Agents work under a franchise system, usually receiving 65-75% of the profits. The Franchisee is expected to open betting shops which serve local customers. These bets transfer in ‘’live-time’’ to the Maltese licensed bookmaker!!
Betting companies where often set-up with as little as 100K starting capital, and they spiralled growth by putting much of the cost on local agents. By that we mean, the partner rents premises, employs staff, and pays all costs associated with the local operation.
More recently, bookmakers saw value in taking customers directly over their website. By doing this they get around the Franchisee and keep all profits for themselves.
POACHING CUSTOMERS FROM FRANCHISEES
A couple of years back, the German state introduced a 5% betting tax on every bet taken from it’s territory. That meant a local agent had to charge 105 for a bet of 100!
While giving up part of the pie was negative for the shop owner, it wasn’t for the Maltese licensed betting company. The reason…
- By waiving the 5% charge, Maltese licensed bookmaker found it easier to encourage customers to bet directly.
- This 5% charge was enough to stop professional punters from betting in shops, easier to control online.
- Bookmakers advertise on TV which is shown in betting shops (ready-made audience)
- Betting shops show branding of the bookmaker (thanks guys for promoting us)
TIPICO vs BET3000 - THE BATTLE FOR THE GERMAN BETTING MARKET
Most Sports-betting punters in Germany consider Tipico and Bet3000 to be the big two. While others such has Tipbet, Cashpoint, Mybet, Ambassador and Tipwin are present, they wouldn’t be our idea of competitive. Lets compare the two in question…
FOUNDERS TIPICO - DREAM TEAM
The founders of Tipico are lawyers (2), a business manager and a Software developer. For those interested in names, Wolfgang Kuentzle and Dieter Pawlik are the lawyers. Mladen Pavlovic the software guy, and the front man Oliver Voigt. The latter was the person who lived in Malta and made the business. Pavlovic created the bet taking (booxware) software, while lawyers Pawlik and Kuentzle fought the ongoing legal battle!
FOUNDER BET3000 - ONE MAN BAND
Simon Springer is the only person who matters at Bet3000. While he’s had cronies such has Jakov Effroni supporting him down the years, Springer is simply a one-man band. For the record, Springer is a Munich based horse racing bookmaker (racing is allowed by the law) who had first moment advantage . However, unlike with Tipico, he failed in many aspects. In fact, from the outside he clearly doesn’t understand the corporate side of business!
TIPICO - THE BEGINNING
Equipped with their new betting license, Tipico started seeking betting-agents in 2004. They where not first, that honour belonged to several Austrian licensed bookmakers. However, unlike them, Tipico had a firm plan and right team in place
The founders of Tipico performed what i would call ‘’blitzkrieg’’ on the German Sports-betting market. They went in with a willingness to deal with anyone, and they found the right partners to execute the plan.
Tipico opened a management branch in Frankfurt Germany, that became the contact point for new and existing partners!
It’s probably fair to say ‘’right place at the right time’’ was one aspect of Tipico’s success, but there is more to it than that……
What Tipico did better than the rest was build a more efficient bet-taking software. Thinking back in time, UK bookmakers where still using pen & paper. We should add, software being used by Austrian bookmakers was very basic, and main competitor Bet3000 was using a prehistoric horse racing (Boyx) software!
The Tipico software is developed ‘’in-house’’ by the same groups sister company Booxware. The development took place in Germany and Croatia, and every resource is used into making it the best available!
Tipico where ahead of others on the German betting market because they answered customers need. Betting terminals, website, in-play odds, cash-out where all big attributes to the success of this company!
TIPICO BENEFITTED FROM THE LEGAL SITUATION
More established international betting companies where not ready to take on the German authorities, this allowed those willing a ‘’free-ride’’.
While UK licensed bookmakers had an online presence in Germany, they where not active in retail. What i can tell you is the founders of Unibet and Expekt checked into the possibility, but without a man on the ground they never got started. Stanleybet who had been active under similar circumstances in Greece and Cyprus attempted to find partners, but no-one liked what they where offering!
To a lesser degree Austrian bookmakers started to struggle because they are not competitive, while other early players such has Digibet, Belgabet, Primebet, Happybet and Topsportwetten fell by the wayside.
During the early days betting shops where often closed by courts/police, but lawyers of Tipico where quick to get them reopened. In fact, that was the same situation with most companies, so any lawyer would have done!
TIPICO BRANDING SUCCESS
Out of all the German focused bookmakers, only Tipico succeeded in branding.
Ex Bayern and Germany international goalkeeper Oliver Kahn is brand ambassador. Tipico sponsors the DFL (German football league), Austrian Tipico Bundesliga , FC Bayern Munich, and FC Bayern Basketball. Tipico have the right to use logo’s from any of the above in advertising.
If you are watching Sky sport in Germany, Tipico are the main advertiser!
TIPICO TAKE CORPORATE ROUTE
At some stage founders of business want to cash-in (exit strategy), and that’s what the owners of Tipico did back in 2016. CVC capital partners became the main shareholder in Tipico by acquiring shares valuing the company at €1.2 billion.
Prior to being put on the market, Tipico needed a clean-up for due diligence purpose. With that in mind, ex b-win.party (GCV holdings) COO Joachim Baca was appointed CEO. The current board consists of (CCO), Marlin Van der Goes, (CRO) Karin Klein and (CFO) Stefan Eck.
We don’t know whether the founders included Rivalo in the sale?. The (skin) Curacao licensed bookmaker was set-up for taking bets from countries such has Turkey & Switzerland where betting is illegal!
Tipico claim to employ 6000, they have offices/structures in Germany, Austria, Croatia, Gibraltar, Columbia and Malta!
Rumour is Tipico are on the market again, send your offers through!
Just a couple of negative comments about Tipico, it can’t all be good!
- Tipico have reneged on a high number of affiliates - contracts are weak and they have found a way not to pay!
- Tipico are known to have an extreme/abnormal customer withdrawal system!
- Partners/agents had commission rates trimmed, citing cost of delivering service/product!
- Like a lot of Franchise partners in this world, it’s been easy to get them to accept worse terms. However, they bitch like mad!
- Rivalo (same owners) is known to renege on payments and they have a very poor trust rating!
BET3000 WIN REPUTATION STAKES
In many ways Bet3000 have a better reputation among punters than Tipico. Simon Springer is an old-fashioned gentleman bookmaker who pays is due. He offers customers higher value odds than rivals Tipico, so his betting offer is well endeared too!
From what we witnessed in most parts of Germany, Bet3000 shops are fuller than those of Tipico. One of the reasons could be shops are mainly in the same (Springer) ownership, and of course the higher value odds!
Bet3000 have always relied on third parties to build software. No doubt Springer will incite being ‘’screwed’’ by software developers, but that’s pretty much standard when you are technically illiterate. In any case, Bet3000 software is behind Tipico.
While Bet3000 have an online presence, the website is not built for modern-day tech savvy customers. To be frank, the operation comes over has being a bit lazy, albeit it’s enough for in-shop customers!
BET3000 UNBALANCED ODDS
Go to the fruit shop and buy 1KG of apples for €2, if you want 2KG the most they will charge maximum €4. In fact, you might get a discount for buying bulk, maybe the 2KG will cost just €3.80!
With Bet3000 you can expect a different experience, in that they screw the customers in the handicap and double chance market.
I have never understood why Bet3000 consider it normal practice to skim the handicap and double chance odds. If Springer was selling this same apples they would be €2 for 1KG and €4.20 for 2KG. If you are a half intelligent (most are not) punter, you will find a loss in value when taking two betting options!
We are not finished - Don’t even start to look at ‘’in-play’’ odds, they are dreadful and that makes them uncompetitive has an online bookmaker!
BET3000 FOUNDER - FAILURE TO DELEGATE
One of the reasons why Bet3000 never reached the heights of Tipico is Springer doesn’t appear to trust his managers. In fact, Springer has had more Managers than a Brazilian football team!
People who are supposedly in charge are just puppets on the Springer string. The founder wants to keep everything for himself, and that’s obviously held Bet3000 back has a company.
We should also mention Bet3000 isn’t very clever with the Franchise system - missed opportunity!
BET3000 - THE JEALOUSY ASPECT (FUNNY)
It’s a rumour mill alright, but arguments coming from Springer include:
- Tipico founders worked for me, they stole my idea!
- I don’t care, i prefer to keep everything under my ownership.
- My wealth is higher than that of the Tipico founders.
- I’m the only real bookmaker in Germany, others copy me!
GERMANY - FUTURE OF BETTING
Betting in Germany is here to stay, but by introducing new regulation the government will stifle growth.
On that note, residents will need to register (customer card) with bookmakers. Monthly stake limits (€1000 is being suggested) will apply. People receiving social benefits won’t be allowed to bet, and the number of locations are to be limited. Suffice to say, planned licensing will affect the Franchise module, and the price of delivering product (extra tax, cost of license, servers, accounting) will increase.
You might ask how will that affect betting companies, the truth is no-one knows. However, licensing removes power from the franchise owners, so no doubt Tipico will benefit in the short-term.
From what we witnessed, Tipico have potential to enter new betting markets. And, while they are a long way short of Bet365, they at least have the ability to make a global business!
With regards to bet3000, they won’t win this pissing contest. The only hope is a buy-out out, but with Springer being complicated that’s unlikely to happen.
Congratulations Tipico, you are the winners in the battle for Germany. However, the challenge is going forwards, and with the ‘’wild-west’’ days gone it will be a massive challenge!
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