A proposed 8 per cent tax on slot turnover could hinder player protection and hurt the newly regulated market, a report warns.<\/p>\n
Germany.- A report from the\u00a0D\u00fcsseldorf Institute for Competition Economics (DICE)<\/strong>\u00a0warns that a proposed\u00a08 per cent tax\u00a0<\/strong>on online slot turnover could\u00a0jeopardise the successful launch of Germany\u2019s new regulated igaming market<\/strong>\u00a0this year.<\/p>\n Commissioned by operator associations Deutscher Sportwettenverband (DSWV) and Deutscher Online Casinoverband (DOCV), the report warns that the tax could also\u00a0hinder player protection goals<\/strong>.<\/p>\n It warns that the tax rate would\u00a0reduce payout ratios<\/strong>, making the new legal market\u00a0unattractive to players<\/strong>, who might resort to unlicensed operations.<\/p>\n Germany has ratified\u00a0new igaming legislation<\/u><\/strong><\/em>\u00a0that will create a regulated online gaming market as of this year. However, the legislation does not set a tax rate for the new market.<\/p>\n A\u00a0working group<\/strong>\u00a0formed by the state finance ministries of Hesse, Nordrhein-Westfalen, Bayern and Berlin has proposed a tax rate of\u00a08 per cent on online slots turnover and 5.3 per cent on online poker stakes<\/strong>.<\/p>\n The economist Dr Justus Haucape, director of DICE, said: \u201cThis stake tax\u00a0massively jeopardises the goal of channeling gambling,<\/strong>\u00a0 because a turnover tax of 8 per cent reduces the possible payout ratios.<\/p>\n \u201cThus the attractiveness and competitiveness of the legal game deteriorate so blatantly that\u00a0many players would rather play in the illegal market<\/strong>.<\/p>\n \u201cThe finance ministries\u2019 working group seems to assume that the volume of previously illegal gambling will not increase. Based on data and experience from abroad, these assumptions are unrealistic and will prove to be incorrect.\u201d<\/p>\n The report added: \u201cA gambling stake tax does not lead to a fight against gambling addiction<\/strong>, but counteracts this goal. In addition, it also significantly reduces the tax base and thus the tax revenue.\u201d<\/p>\n It said that a game with a 96% return-to-player rate (RTP) would have its RTP rate reduced to 88%.<\/p>\n Haucap also noted that a stake tax for online poker made little sense since the rake that operators take from a game is only a small percentage of total stakes.<\/p>\n He suggested that instead of taxing turnover, the state should tax\u00a0gross gaming revenue at between 15 and 20 per cent<\/strong>.<\/p>\n He noted that\u00a0revenue-based taxes were the European norm<\/strong>, averaging at around 19 per cent.<\/p>\n \u00a0<\/strong><\/p>\n