-
Casinos for you
Brexit and High Taxes Continue to Plague Regulated Gambling in Germany
By Shane Addinall Feb 10, 2021 IndustryGerman authorities are hard at work to implement newly launched gambling regulations. There are 21 sports betting licenses already granted with 35 in the pipeline. Brexit and high taxes are plaguing the progress.Around the world, countries are going through the motions to provide better regulations for the developing online gambling industry.
Germany is among the many who is currently shaking things up with new laws and regulations for the ever-growing industry.
Due to COVID-19 and various other hurdles, the launch of the newly regulated Dutch online market has been postponed to 1 October 2021.
German authorities are ensuring the industry starts in an organised and properly regulated manner, but concerns are arising regarding the impact of Brexit on the budding market.
The Struggle for Licensing
Any operators who wish to offer services in Germany are required to obtain a German gambling license, as per Section 4 (1) of the State Treaty on Gambling. According to the Glücksspielstaatsvertrag (GlüStV) a license can only be granted to applicants residing in any of the member states of the European Union (EU), or within a state that has signed the Agreement on the European Economic Area (EEA).
For providers with registered offices within the United Kingdom, Brexit is causing a massive problem. This is due to the UK no longer being considered an EU member state or EEA member state after Brexit. Now, these operators are required to establish registered offices in Germany or other EU/EEA member states to obtain their German Gambling License.
Gibraltar, which has become a hub for gambling operators, will also no longer be considered an EU/EEA member state. Thus, it will also need to register an office in one of the legally accepted regions. The same goes for the Isle of Man and the Channel Islands. With the only good news being that Malta continues to be part of the EU and the EEA. Allowing software providers located here to apply for German gambling licenses.
Apart from getting licensing approval, there are other issues to consider which include problems regarding payment methods used for gambling-related transactions.
According to the licensing requirements, all payments must be processed via a German account or a credit institution within an EU member state. This immediately closes the option of paying from UK or Gibraltar bank accounts.
Tight Regulations for German Market
To date, there have been 21 betting licenses granted with 35 license applications still under review.
German regulator, Regierungspräsidium Darmstadt (Hesse), revealed there is no telling how much longer they require to decide the fate of the pending applications. All sports betting license applications from operators who are found unreliable due to non-compliance to the transitional regime will be rejected.
With 87% of the German betting market already regulated and 21 major operators owning a sports betting license, the future national gambling regulator has decided on permanently establishing its base in the city of Halle, in the state of Sachsen-Anhalt.
Currently, licensing applications are only open for sports betting and commercial betting (lotteries). Once the new GlüStV 2021 comes into force it will open the doors to new possibilities which include the licensing of online casino games such as Online Slots and possibly online poker.
Tax of Doom
A working group from the State Finance Ministries of Hesse, Nordrhein-Westfalen, Bayern, and Berlin suggested an 8% tax on online slot turnover plus 5.3% tax on poker stakes.
The discussion has been put on hold temporarily but has already caused quite a stir with many believing it would make the German-regulated market uncompetitive. Instead, driving players towards illegal offerings.
Post-Brexit Trade Deal
After months of negotiations, a post-Brexit trade deal has been put in place between the EU and the UK. The deal outlines the future between the two now that the UK has officially removed itself from the EU.
The agreement covers various aspects and issues but unfortunately for online gambling companies, there is still a lot of grey area.
At the current time, there is an interim agreement in place, but this is set to expire in less than 6 months after which the future is uncertain.
You might also like