The European Gaming and Betting Association has urged German lawmakers to rethink the proposed gambling levy, warning of a black market uptick and a land-based advantage.
According to the trade group, a plan by Germany’s Bundesrat to tax online poker and slots stakes at punitive rates would encourage more players to use unlicensed platforms.
It goes on to say that the move would give land-based operators a “substantial and unfair” tax benefit, which could amount to €290 million per year in Bavaria alone.
Violation of EU state aid laws
It cautioned that the German Bundesrat’s plan to levy a 5.3 percent tax on online poker and slots stakes would weaken the country’s recent online gambling regulations’ main goal and would be in violation of EU state aid laws.
Maarten Haijer, secretary general of the EGBA explained: “We welcome the regulation of the German online gambling market, and we fully appreciate that an online gambling tax will need to be paid.
“However, we urge the German parliament to reconsider the proposed punitive rate of the tax because it will push German players to use unprotected and unregulated black-market websites and give land-based operators a massive tax advantage.
“We stand ready to share our experiences in other jurisdictions of the EU, and firmly believe that a tax level can be established which strikes the right balance between meeting the needs of the German consumer while ensuring sufficient tax revenue for the state.
“Should the measure go ahead as proposed, we will have to consider all available options, including filing a state aid complaint with the European Commission.”
According to a recent player survey released by Goldmedia, the tax measure will have an effect on the competitiveness of the approved and controlled online poker and slots offer, leading to 49 percent of German players opting to use unregulated websites.
Second, the EGBA claims that the proposal is punitive, claiming that online poker and slots will be taxed four to five times higher than their retail equivalents in land-based casinos, and 15 times higher than slots in land-based amusement arcades in Bavaria, for example.
In light of these issues, the EGBA encourages German lawmakers to rethink the proposed tax measure when it comes up for discussion in the Bundestag in the coming weeks.
Alternative tax rates, more closely associated with those levied by other EU member states, will ensure that the vast majority of German players use licenced websites and profit from German consumer protection laws, according to the country’s new regulation’s main goal.
The association has expressed its reservations about the proposed tax measure to the European Commission and will weigh all options, including filing a formal state aid complaint with the EC, if it is implemented as proposed.