EGBA launches complaint over German online poker tax
Trade body submits petition to European Commission over “substantial and unfair” tax advantages for land-based operators
Germany’s proposed 5.3% tax on online poker and slots gameplay hands a “substantial and unfair” tax advantage to the country’s land-based casinos, according to the European Gaming and Betting Association (EGBA).
The Brussels-based trade body has submitted a complaint to the European Commission (EC) on the grounds that it effectively contravenes EU state aid rules by favouring land-based casinos over their online counterparts.
The proposal, the EGBA claims, would see online poker and slots stakes being taxed at a rate of four to five times higher than land-based firms, rising to 15 times higher when comparing online slots to those found in amusement arcades.
Using the example of the Bavarian market, the trade body suggested the tax, if implemented, would result in a tax advantage of €290m (£251m) annually for the state’s land-based operators.
Under EU rules, it is illegal for member states to give financial help to some companies and not others in a way which distorts fair competition.
If the EC finds that rules have been violated, it has the option to start a ‘recovery case’ which aims to remove the undue advantage granted to a company (or companies) and to restore the market to its state before the aforementioned aid was granted.
There is a limitation period of 10 years for recovery.
In May, the EGBA claimed the tax, which is still under consideration by the German Bundesrat, would reduce channelisation to licensed operators to as little as 51%, with the trade body threatening to take further action against German legislators should they choose to proceed.
Speaking about the need to deliver on this threat, EGBA secretary general Maarten Haijer said: “We have previously made our concerns about the tax proposal known to the German authorities but to no avail and they will now need to justify the measure under EU law.
“We appreciate the efforts made in recent years towards introducing a new online gambling regulation in the country and recognise that an appropriate tax will need to be paid by online gambling operators.
“However, the rate of the proposed tax is punitively high and will distort market competition, and directly benefit Germany’s land-based gambling establishments over their online counterparts.
“We call on German politicians to rethink the proposed tax rate and bring it closer in line with the tax rate applied to online casino products in other EU countries,” Haijer added.