EGBA

EGBA – European Gaming and Betting Association claims Germany’s proposed 5.3 per cent online casino turnover tax violates EU law.

The new state treaty on gambling has finally been approved by all 16 of Germany’s federal states, providing a framework for the launch of a licensed igaming market, but there is still much debate about the proposed tax rate.

The tax rate for the market, due to launch on July 1, has been set at 5.3 per cent on online slots and poker turnover.

The EGBA has previously stated that it believes the tax to be punitive and will dissuade operators from entering Germany’s licensed market, but now the trade body has argued that the rate is also a violation of European Union law.

It argues that it would give the land-based gaming sector an advantage over online gaming, while EU law prohibits member states from granting advantages to “specific companies or industry sectors, or to companies located in specific regions”.

There are situations in which exemptions can be made, but they must be granted on a case-by-case basis.

The EGBA said: “The proposed tax measure is punitive and would, in Bavaria for example, result in online poker and slots being taxed at rates four to five times higher than their retail equivalent land-based casinos and 15 times higher than slots in land-based amusement arcades.
This would provide a substantial and unfair tax advantage to Germany’s land-based operators over their online counterparts. EGBA believes that this would constitute an illegal state aid under EU law.”

Secretary general Maarten Haijer said the EGBA may file a complaint to the EU if the current tax proposal goes ahead.

He said: “We welcome the regulation of the German online gambling market, and we fully appreciate that an online gambling tax will need to be paid.
However, we urge the German parliament to reconsider the proposed punitive rate of 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.
We stand ready to share our experiences in other jurisdictions of the EU, and firmly believe that a tax level can be established which strikes the right balance between meeting the needs of the German consumer while ensuring sufficient tax revenue for the state.
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.”

Land-based tax rates in Germany depend on each state, but a recent study by Goldmedia conducted for Entain, Flutter Entertainment and Novomatic subsidiary Greentube found that the difference in tax between the land-based and online sector in Bavaria would reach €293.9m.

The study also found that the tax rate could cause 49 per cent of players to use unlicensed gaming sites.

The EGBA said: “In light of these concerns, EGBA urges members of the German parliament to reconsider the proposed tax measure when it is debated in the Bundestag in the coming weeks.”

You should read also the news from HERE.

You can subscribe easy to the Casino Life & Business Magazine Tv channel from here…