EGBA Calls for New Proposed Tax in Germany to be Amended Before the Fact
Published May 13, 2021 by Lee R
EGBA is coming out against a new tax in Germany, but what is the preferred model?
A new tax in the soon-to-open German market is coming under controversy, with a major trade organisation urging German Parliament to reconsider the proposal in open debate.
The Tax
The European Gaming and Betting Association (EGBA) has expressed concern that the German Bundesrat's proposed 5.3% tax on online poker and slots stakes runs counter to the new online gambling regime's goals, and is further a potential breach of EU state aid rules.
Tax Impact
The EGBA specifically takes issue with the tax's impact on competitiveness, quoting Goldmedia survey data estimating 49% of German players would be driven to unregulated websites.
Punitive Nature?
The EGBA characterised the proposal as “punitive,” because it results in taxation of online poker and slots at higher rates than retail land-based casinos, suggesting tax advantage for land-based operators as high as €290m (£250m) a year in the individual state of Bavaria alone.
EGBA Leader Speaks
The EGBA is calling for German parliament members to reconsider the proposal in Bundestag debate in the coming weeks, and devise a more equitable taxation system:
EGBA secretary general Maarten Haijer has indicated his support of taxation:
“We welcome the regulation of the German online gambling market, and we fully appreciate that an online gambling tax will need to be paid.”
Driving Players Offshore?
After prefacing respect for tax, Haijer went on to clarify his organisation's position urging the German parliament to reconsider 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.”
Disrupting Competition?
The tax advantage to land-based operations runs counter to principles of EU general law regarding free market competition—if it willfully would spur such disproportionate percentage of one of iGaming's competitive sectors.
EGBA Expertise Made Available
Haijer reminded of the wealth of evidence his organisation has to draw upon, and asserted that the EGBA was fully prepared to “share our experiences in other jurisdictions of the EU.”
Outlook
As clear as Haijer has made his position, the model which his organisation has to propose as an alternative would be the next logical step in the argument, which the iGaming industry would hope to see as soon as possible as a constructive measure.
