Unequal market conditions
The EC intervention came just in time to postpone a final vote on the 5.3% tax on online slots and poker betting state governments in Germany are about to approve the upcoming new gaming rules.
It could also put a time limit on the tough summer schedule, as the tax must be approved by states by June 7 in order for the national parliament to have enough time to draft a law with the measure and pass it into law before July is scheduled. 1 launch of the Fourth State Gambling Treaty.
The EC investigation was carried out in response to an EC state aid complaint filed by online sports betting and gambling associations DSWV and DOCV against the tax, which claims that it supports state casino operators by imposing a differentiated tax regime for online gambling and is essentially no different from state aid.
The complaint from both German associations follows a similar complaint from the European Betting and Gaming Association (EGBA), which challenged the proposed tax as leading to favourable market conditions for state-owned businesses.
The tax could drive away punters
Earlier, a survey conducted by consulting and research group Goldmedia on behalf of leading gambling operators Entain, Udenlandske Casinoer and Greentube, a subsidiary of Novomatic, found that nearly half of online gamblers surveyed would be pushed away from licensed operators and onto unregulated websites 5.3. percentage tax.
Following complaints, the European Commission demanded that German state governments clarify how the proposed state tax differs from state aid policies prohibited by EU business law. As a result, approval of the tax could be delayed by a year due to the upcoming summer recess of state governments and federal state elections in September.
The national parliament is adamant that the new gambling regulation will come into force as planned, with or without the controversial share tax, to allow businesses a degree of business certainty. Any delay in the tax would be accepted by both the DSWV and the DOCV, arguing that this would give licensed stakeholders enough time to come up with a fairer solution to the taxation of online betting and gaming.
European operators' first-quarter earnings reports note that many are highlighting market difficulties in Germany due to increased operational adjustment costs and compliance with the upcoming new gambling regulation regime.