April 08, 2011

German gambling tax proposal receives much criticism

The German government has proposed to collect 16.7 percent gambling tax on sports betting from gambling operators with a national license, starting from next year.

After years of criticism it received over the monopoly on sports betting in Germany, the leaders of the 16 states in Germany determined that starting from 2012, the country will offer seven national gambling licenses to private companies. After a meeting in Berlin the states said that they had agreed to open the gambling market for a trial period of 5 years. Germany came under criticism from the EU about their lottery monopoly that gives the government the exclusive right to offer sports betting, according to the EC this is against the European legislation on free trade in services and goods. The European court said that the gambling laws are not consistently and systematically enough to support the hypothesis that the is law to protect the people against the social risks of gambling, but rather to generate additional revenue for the state.

In Germany, only horse racing and slot machines are legal and, companies with a license can offer these games anywhere. But sports betting and lotteries were until now in the hands of the state monopoly, much to the frustration of betting companies like Bwin. Many providers of online gambling, however, offer their services in Germany because the legislation is not properly enforced. The new legislation, effective starting 2012 will issue seven gambling licenses to companies that will pay 16.7 percent tax on gross bets. The governors said they will only allow betting on the outcome of matches and not on the half-time results or the names of the scorers. Gambling companies are allowed to advertise in the stadiums of football clubs, but not on television.

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