The European Gaming and Betting Association (EGBA) yesterday issued a statement in which it warned officials in Germany against implementing a proposed 5.3% federal tax on all online poker and slot stakes.
The Brussels-headquartered trade group detailed that the proposition from the German Bundesrat would breach European Union laws on state aid and additionally undermine the objectives of the country’s New State Treaty on Gambling, which is set to inaugurate a completely new licensing, regulatory and taxation regime for land-based and online gaming operations.
The EGBA moreover stated that the suggested tax could furthermore have the unintended consequence of giving an unfair advantage to land-based gaming operations while pushing remote players away from licensed and regulated sites towards offshore domains not subject to the duty. In making this latter claim, the organization cited a study from German research group Goldmedia that forecast up to 49% of local online gamblers could migrate to unregulated websites should the proposed tariff be implemented.
Read a statement from the EGBA…
“Players outside of 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 due to enter into force on July 1, 2021.”
The EGBA also disclosed that the envisioned tariff would grant a ‘substantial tax advantage’ to land-based operators that could reach as high as €290 million ($348 million) every year in the state of Bavaria alone. It declared that such a move would equate to a ‘punitive’ punishment against German iGaming providers and see online poker and slots taxed at rates that were up to five times higher than those levied against equivalent land-based casinos.
The influential organization proclaimed that it had already shared its concerns regarding the proposed iGaming levy with the European Commission and is now urging the 69 members of the German Bundesrat ‘to reconsider the proposed tax measure when it is debated’ over the course of the next few weeks.
The EGBA’s statement read…
“Alternative tax rates more closely aligned to those imposed by other European Union member states would ensure that the overwhelming majority of German players use licensed websites and benefit from the protection of German consumer laws in line with the key objective of the country’s new online gambling regulation.”
Maarten Haijer serves as the Secretary General for the EGBA and he used the statement to welcome the regulation of the German iGaming market under the New State Treaty on Gambling and pronounce ‘that an online gambling tax will need to be paid’. However, he furthermore asserted that officials should endeavor to establish a rate that ‘strikes the right balance’ between bringing in revenues for the states and ‘meeting the needs of the German consumer’.
Read a statement from Haijer…
“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.”