German online slots tax may drive half of players to unlicensed market

Germany
Germany

As the last state in Germany ratifies the country’s new igaming legislation, a survey suggests the planned 5.3 per cent tax on online slot stakes may drive 49 per cent of customers to the unlicensed market.

Germany.- This week the last state ratified Germany’s new interstate gambling treaty, paving the way for the launch of a regulated igaming market across all 16 federal states from July 1. However, things don’t bode well for the market if a new study from Goldmedia is anything to judge by.

The survey of 619 slot players found that the planned 5.3 per cent tax on online slot stakes could lead 49 per cent of players to stick with unlicensed operators if it causes licensed operators to reduce payout ratios.

The study said that licensed operators would be likely to offer payout rates of around 90 per cent in order to absorb the tax, while unlicensed operators would be able to offer payout rates of around 98 per cent. 

It found that 54 per cent of respondents valued payout percentages more than any other factor when deciding where to play. Only 31 per cent said that an operator being licensed was the most important factor.

The remaining respondents were split evenly between mentioning the range of products or player protection measures as most important. 

The study, which was commissioned by a clutch of gaming operators, comprising Entain, Flutter Entertainment and Greentube, also found that 31 per cent of respondents admitted to using black market sites every month. 

Meanwhile, SEO analysis carried out in tandem showed that unregulated gaming sites received “significantly more hits” than those that were compliant with Germany’s transition regime to its licensed igaming market. 

Goldmedia said: “The study published today shows that currently 73 to 75 percent of the regular use of online gaming is based on offers that are fundamentally different to the new regulatory requirements.

“In the study, the selection preferences of the players for online gaming offers with a focus on online slots were determined. The result is that for players in Germany, payout rates are more important than a German license and the associated security aspects.”

North Rhine-Westphalia ratifies gambling treaty

With Nordrhein-Westfalen (North Rhine-Westphalia) becoming the last German state to ratify German’s new gambling legislation this week, the new regime for licensed igaming is due to begin from July 1.

State president, Armin Laschet, said: “This state treaty was a Herculean task and, as a result, is a strong sign of how federalism lives and functions in Germany and how it comes to the right results through sometimes arduous negotiations.

“A joint effort was made to solve a problem that had seemed unsolvable for years. The conflicting interests, needs and concerns for the benefit of all 16 states were considered.”

The state of Sachsen-Anhalt, which approved the treaty last week, will host the new national regulatory body in the city of Halle from 2022 and will be responsible for monitoring users’ activity and making test purchases to ensure play is legal. It will also have the power to block IP addresses.

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