Questions Over New German Gambling Proposal

Germany still poses a challenge for European online gambling regulators, even though the country has introduced industry reformed following European Commission objections about the nature of its gambling regulations.

Proposed Tax Lowered

Fifteen of Germany's 16 federal states agreed last week to reduce a proposed 16.6 percent online gambling turnover tax to just 5%, and in addition they announced that they would issue 20 licenses instead of the original promise of seven. However, the new regulations would ban all online casino and poker games.

In any case, the tax reduction still falls short of what the one remaining state - Schleswig Holstein, decided months ago in its own gambling legislation. The northern state decided on a 20% gross profits tax, which although higher than the turnover tax is seen as more favourable by operators.

Gaming Operators React

European online gambling operator Bwin.Party called last Thursday's announcement "a step forward," but said it was important to find a solution in line with market realities and compliant with EU law.

Betfair was more critical, saying the proposals were "incompatible" with EU law and added that the final makeup of the new state treaty on gambling "remains uncertain."

The CEO of Remote Gambling Association (RGA), the largest trade association in the world for internet gambling operators, said the attitude of the German states was disappointing, pointing out that it severely limits betting amounts and prohibits online casinos, poker rooms and live betting.

European Commission Concerned

Last week's revised regulations followed an announcement from the European Commission expressing concern that the original proposals violated the freedom of companies to offer services in the European Union. The Commission is yet to react formally to the latest proposals.

From an online gambling perspective, the new proposals are obviously an improvement, but they still do not go far enough and therefore it's hard to say whether things will change for the better.