Germany’s fourth state treaty on gambling, which allows online casino, has been approved by all 16 states and will come into force on 1 July.
Tax rates for online slots and poker have not been finalized. The country’s Federal Council (Bundesrat) has sent a proposal to the legislature (Bundestag) for final approval.
Under the proposal, online slots and poker would be taxed at 5.3% of turnover. The European Gaming and Betting Association (EGBA) has described this rate as “punitive” and argues that it will hinder the treaty’s objective of bringing players into the regulated market.
EGBA cites a report from Goldmedia, on behalf of Entain, Flutter Entertainment, and Novomatic subsidiary Greentube, which suggests that the high tax rate could lead to 49% of players using unlicensed gambling sites.
EGBA raises concerns about the proposed tax rate being in violation of European law. It argues that the rate would offer an advantage to the land-based gambling sector over the online sector, which goes against EU state aid rules.
The tax rate would also give Germany’s land-based operators a significant tax advantage over their online counterparts. EGBA estimates that the tax bills for online operators in Bavaria would be four to five times higher for poker and slots compared to land-based casinos and 15 times higher than land-based amusement arcades.
EGBA urges members of the German parliament to reconsider the proposed tax measure when it is debated in the Bundestag in the coming weeks. If the tax proposal is put in place, EGBA is prepared to file a complaint to the EU.
Currently, operators offering online gambling in Germany must adhere to the terms of the state treaty, which includes restrictions such as a €1 stake limit per spin for slots and an average spin speed of five seconds.
