The bill outlines the tax structure for online slots and poker in compliance with Germany’s new State Treaty on Gambling (Glücksspielneuregulierungstaatsvetrag). The implementation of this new regulatory model is planned for 1 July, following ratification by all 16 federal states. The proposal for a 5.3% tax on turnover for both slots and poker has become a point of contention within the gambling industry, as it is considered excessively high. Concerns have been raised that this tax may put licensed operators at a disadvantage compared to offshore operators, who may not be subject to the same restrictions such as caps on slot stakes and spin speeds, and a €1,000 monthly deposit limit.
Leading economist Dr Justus Haucap and the Düsseldorf Institute for Competition Economics (DICE), in a report submitted to the Bundesrat, warned that the proposed tax could potentially undermine the viability of regulated gaming in Germany. The report suggested an alternative approach of taxing gross revenue at a rate of 15% to 20%, which would align more closely with tax rates in other European countries. Another report commissioned by Entain, Flutter, and Greentube from Goldmedia highlighted that taxing turnover at 5.3% could result in half of all German slots players turning to unregulated sites. The European Gaming and Betting Association (EGBA) argued that the high tax rate also violates European law, particularly as it places online operators at a significantly higher tax burden compared to their land-based counterparts.
Operator association the Deutscher Sportwettenverband (DSWV), during the state treaty discussions in Sachsen, pushed for lower taxes and insisted that if a turnover tax were to be implemented, it should not exceed 1%. However, DSWV stated that a gross revenue tax ranging from 15% to 20% would be preferable. Presently, operators can offer online casino games in Germany under a transitional system, provided they comply with the terms of the new treaty. These restrictions have already impacted the revenue of operators, with Bet-at-home reporting a 5.5% year-on-year decline and LeoVegas experiencing a significant 55.7% drop in revenue from Germany.
The dates for hearings on the bill in relevant committees have yet to be announced.
