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German Government Kills National Gaming Industry with Regulations

By Joss Wood, Rakeback.com Poker News Staff Writer

German PokerThe German Länder (States) appear to have reached agreement on the form of regulations they intend to apply to online gaming.  These regulations would apply only to businesses attempting to operate from within Germany itself. 

The main points of agreement are:

  • Only 20 licenses will be issued.
  • A special gambling tax of 5% on turnover will apply
  • No casino games will be permitted
  • Poker will not be permitted
  • Betting amounts will be severely limited
  • No live betting will be allowed

Reaction to Proposals

The European Commission which ultimately has legal jurisdiction over these matters has objected that the proposals breach EU competition law.

The gaming industry has been even more critical. They know from the French experience, that the turnover tax will make it extremely difficult to be profitable, and the gaming restrictions mean that the customer base will be tiny.

One Länder, Schleswig-Holstein, has passed a set of laws covering online gaming that are much more useable. The gambling tax is paid on gross profit, not turnover, and a much wider range of games is available. Unfortunately, the other Länder have not followed this example, and have produced something politically acceptable, but completely impractical.

What makes a mockery of the whole set of proposals is that there are no legal restrictions on Germans playing poker or casino games on sites regulated in other countries.

Why would any company want to set up under German regulation when it can be regulated in Gibraltar, and attract German customers to a much more attractive gaming package while booking much higher profits?

It looks like it will be some time before Germany finds a workable route to securing revenue from online gaming operators.

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