Germany Proposes High Online Gambling Taxation

Published Thursday, April 07, 2011 - Online-Casinos.com

Germany seems to be bucking conventional wisdom and is tightening the controls on the blossoming online gambling industry within Germany’s borders.
This is significant news for the executives of the newly created merged Bwin and Party Gaming firms into Bwin.party. It means that there will be some discussions and efforts made to make the German online betting market accessible to all. They have suggested in no uncertain terms that the proposed restrictions will keep all completion at bay.

German federal states announced that private firms bidding for seven national betting licences would face a 16.7% tax on turnover. This has caused some concern for investors of the new firm Bwin.party as shares in the sports betting and poker room fell by fifteen percent after the proposal was announced.
Not only is this news not good for the big gambling firms but also for consumers of the services in Germany. With less competition the odds are not as good and the variety less interesting. It has been suggested with the duty and fees set so high it would be difficult to make a profit for any operator entering the market.

Co-chief executive of Bwin.party, Norbert Teufelberger, stated, "A proposed tax rate of 16% on the stakes placed in sports betting would make it impossible to offer a competitive product." It should be noted that Bwin.party receives about 25 % of it revenues from the German online gambling market.
Germany decided recently it would open the market up to outside competitors with new laws expected to be completely in play by June of 2011. New rules allow for some media adverts in stadiums but not on the television.
Teufelberger suggested that the black market will profit as gamblers look for better deals, "This would mean that the proposed model would fail to meet its objectives of channelling consumer demand, offering player protection and combating fraud.” 

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