Bundestag approves Germany’s 5.3% turnover tax
The bill – drawn up by the Federal Council (Bundesrat) – was approved for a floor vote by the Finance Committee earlier this week.
It sets out tax rates for online casino games, which are set to become fully legal across Germany from July 1, under the country’s new State Treaty on Gambling, the Glücksspielneuregulierungstaatsvetrag (GlüNeuRStv).
The proposal would set taxes for online slots and online poker at 5.3% of turnover. The Finance Committee also noted that the tax is intended to apply to unlicensed gambling, as well as licensed offerings.
As expected, the bill was passed in the floor vote thanks to the governing coalition of the Christian Democratic Union (CDU), its Bavarian equivalent the Christian Social Union (CSU) and the Social Democratic Party (SPD), as well as the Green Party.
The bill was opposed by Alternative für Deutschland (AfD) and the Free Democratic Party (FDP).
Die Linke abstained from voting.
However, despite being passed by the Bundestag, the proposal may still face a legal hurdle before it can be implemented.
The European Gaming and Betting Association (EGBA) and Der Deutsche Sportwettenverband (DVSW) both filed a complaint with the EU in May, arguing the tax is illegal state aid as it favours the land-based industry over online.
The EGBA noted that while taxes vary between states, the difference in tax bills between the land-based and online sectors in Bavaria would come to €293.9m, with slot halls seeing the largest advantage at €178.1m.
The choice to implement a turnover tax at this level has also led to concerns about channelisation in the market. One study – conducted by Goldmedia consulting and research group on behalf of Entain, Flutter Entertainment and Novomatic subsidiary Greentube – claimed that the tax could lead 49% of players to gamble with unlicensed operators.
The state treaty (GlüNeuRStv), meanwhile, was first approved by lawmakers in March 2020. It is set to take force at the start of July after it was approved by all 16 federal states.
It will legalise online casino games in Germany for the first time, but impose certain restrictions, such as a €1 per spin stake limit for online slots.
Currently, operators may offer online casino games under a transition period, provided they keep to the rules of the new treaty. However, operators such as LeoVegas have said that this has had a major impact on revenue.