Malta’s association of iGaming companies, iGen, has come out against a controversial proposition to introduce a “punitive” tax rate on online poker and slots stakes in Germany, saying they “breach EU state aid rules”, and would be “to the detriment of the online operators which are disproportionately based in jurisdictions such as Malta”.
The proposal by Germany’s Federal Council would see the introduction of a 5.3 per cent tax on online poker and slots stakes and has also drawn the criticism of the European Gaming and Betting Association (EGBA), which claims that the measure would undermine the key objectives of the country’s new online gambling regulations.
By infringing upon the competitiveness of the licensed and regulated online poker and slots offerings, it says, the new tax would encourage consumers to turn to unlicensed offerings. According to a survey published by Goldmedia, 49 per cent of German players could turn to unregulated websites.
The EGBA explains that “players outside of the regulated market would be deprived of the protection of German consumer laws”.
Aside from this, the Association insists that the proposed tax measure is “punitive”, and could result in online poker and slots being taxed at rates four to five times higher than they retail equivalent land-based casinos, and fifteen times higher than slots in land-based amusement arcades, in some German localities.
The EGBA believes that this would “provide a substantial and unfair tax advantage to Germany’s land-based operators over their online counterparts”, thus breaching EU competition laws.
In light of these concerns, it has urged members of the German parliament to reconsider the proposed tax measures.
“Alternative tax measures, more closely aligned to those imposed by other EU member states”, the organisation says, “would ensure the overwhelming majority of German players use licensed websites and benefit from the protection of German consumer laws”.
The European Commission has previously (in 2011) determined that differentiated tax treatment between online and land-based casinos qualifies as state aid under EU law.
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