German gambling tax illegal – EGBA warns

The proposed tax introduction would undermine the key objective of the country’s new rules to direct online poker and slots customers into a regulated market

As Germany is preparing to introduce new online gambling regulations as from July, the European Gaming and Betting Association (EGBA) warned that a proposal by the German Bundesrat to introduce a 5.3 per cent tax on online poker and slots stakes would undermine the key objective of the country’s new rules to direct online poker and slots customers into a regulated market and would be in breach of EU state aid rules.

In a statement, EGBA said that the effect of the tax measure would be harmful on two main aspects.

It would impinge upon the competitiveness of the licensed and regulated online poker and slots offer and lead to 49 per cent of German players preferring to use unregulated websites, according to a new player survey published by Goldmedia.

At the same time, players outside the regulated market would be deprived of the protection of German consumer laws, rendering the proposed tax incompatible with the key objective of the country’s new online gambling regulation.

According to EGBA, another impact the proposed tax measure would have is that it is punitive and would result in online poker and slots being taxed at rates 4-5 times higher than their retail equivalent land-based casinos and 15 times higher than slots in land-based amusement arcades.

This would provide a substantial and unfair tax advantage to Germany’s land-based operators over their online counterparts and would constitute illegal state aid under EU law, EGBA insisted.

Urging members of the German parliament to reconsider the proposed tax measure, Marteen Haijar – EGBA Secretary General warned that 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.”

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