In Germany and the Deutscher Sportwettenverband (DSWV) industry representative has reportedly filed an official complaint concerning the iGaming tax rates contained within the country’s recently-ratified New State Treaty on Gambling.

According to a report from iGamingBusiness.com, the action has been lodged with the European Commission and argues that the coming system represents illegal state aid because it intends to tax the turnover on online poker and slot games at 5.3%, which could be higher than that due to be accessed against land-based operations such as casinos and gaming halls. The source detailed that many industry observers have argued that the proposed system is unworkable and may end up driving local iGaming aficionados into the hands of unlicensed foreign domains.

Prevailing prohibition:

Under laws administered by the European Union, member states are reportedly not permitted to pass regulations that give an unfair advantage through rates of tax to ‘specific companies or industry sectors or to companies located in specific regions’. Although there are some exceptions, which are usually accessed on case-by-case bases, a recent study from German research group Goldmedia purportedly predicted that the difference in annual levies for the land-based and online sectors in Bavaria alone could come to €293.9 million ($359.7 million) with the southern state’s slot halls benefitting to the tune of some €178.1 million ($217.9 million).

Counterpart condemnation:

The action from the DSWV, which represents online sportsbetting operators across Germany, was reportedly preceded almost a month ago by analogous criticism from the European Gaming and Betting Association (EGBA). This pan-European body purportedly called the proposed tax rates contained within the New State Treaty on Gambling ‘punitive’ as they would favor the land-based sector over its online counterpart.

This was reportedly heralded by the investigation from Goldmedia, which was commissioned by prominent iGaming operators Entain, Greentube and Flutter Entertainment and encompassed an assertion that the resultant local channelization rate could top out at a mere 51%.

Interim industry:

The New State Treaty on Gambling is reportedly set to come into force from the first day of next month so as to allow iGaming firms across Germany to begin offering their services to local aficionados. In advance of this date and the nation is now operating under a transitional regime that permits companies to go live so long as they agree to abide by the coming rules, which encompass a €1 ($1.22) limit on individual slot stakes with an average spin speed of five seconds. Well-known operators LeoVegas AB and Bet-At-Home.com AG purportedly pronounced that the coming scheme’s limitations have already hurt their first-quarter revenues.