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Germany’s 5.3% Turnover Tax Triggers Online Poker Exodus
By Jeff Osienya Jul 04, 2021 IndustryAfter the prohibitive 5.3% turnover tax took effect in Germany’s online poker scene on July 1st, online poker brands have chosen to withdraw part of their services. Some operators like Betsson have left the German online gambling market in its entirety.On Thursday, July 1st, 2021, Germany’s controversial turnover tax came into effect after it was approved by the country’s federal parliament known as the Bundestag a week prior. This new regulation under Germany’s State Treaty on Gambling imposes a 5.3% turnover tax on online slot machines and poker games. And it applies to both licensed and unlicensed online casino operators serving players in the German market.
In a nutshell, the turnover tax law slaps a 5.3% rollover fee for any money that a player spends on an online casino or online slot machine game. That rollover tax will go to the country’s tax coffers regardless of whatever amount the player wins in return.
When Germany’s state-level lawmakers first approved the bill in March, before it was referred to the Bundestag, German-facing online poker operators had to tap into their self-preservation instincts. Fearing that the new turnover tax may end up crushing their potential to make profits from their online poker offerings, the operators resorted to drastic but necessary measures.
Unibet and PokerStars were the first to announce their plan to cut down the online poker options on their menus, but other brands like GGPoker, Betsson, and Partypoker followed suit. Here’s a highlight of the measures that the five brands took to cushion themselves from any potential losses and remain compliant with the new turnover tax laws:
Unibet Poker
Kindred’s Unibet made its announcement as early as March 17th in preparation for the eventuality of the turnover tax on its community forum. So, as of July 1st, Unibet Poker is no longer offering cash games, Sit-and-Go tournaments (SNGs), and loyalty programs for German players. As a result, any players who had active tickets for any of the canceled offerings received compensation in the form of bonus points or cash, depending on specific requirements. German SNG tickets that were still active, for instance, were converted to bonus points.
PokerStars
PokerStars, the renowned online poker giant, announced a slew of new restrictions, on June 24th, about a week before implementation of the rollover tax law. Starting July 1st, some of the significant changes that PokerStars introduced include restrictions to payment channels and increased the standard rake to cover the turnover tax. In addition, the Stars Rewards program for PokerStars has also been modified for German patrons. Overall, following the turnover tax enactment, the most drastic change on PokerStars’ offering in Germany is the removal of higher stakes games.
GGPoker
GGPoker followed its German-facing counterparts and disclosed its plans on June 30th via an email to its members, citing the new changes that came on July 1st. The prominent poker brand has stopped offering VIP cash games to German players and suspended its All-in or Fold (AoF) Featured Tables in its lobby. Moreover, the GGPoker has also halted its High Roller tournaments on all levels, including satellite events. Features like the “Move Table” function for German players have also been suspended temporarily, and the operator also announced that it could introduce more changes later as needed.
iPoker Network - Betsson
The revered iPoker Network product has also shaken things up across its German-facing partner sites to abide by the new regulations and steer away from any potential revenue shortfall. While individual operator rooms in the iPoker Network have the liberty to decide on a course of action as they see fit, Betsson has cut all losses and exited the German market completely.
This is a massive blow for the network as Betsson was one of the largest sites offering the iPoker Network in the German market. However, its exit is not because of the rollover tax alone. Betsson also decided to walk out of the country as Germany has also enacted new online gambling regulations that significantly change how casino operators pay their affiliates.
And in the case of affiliates, Betsson has gone as far as placing all affiliate payments on hold as it takes a step back to address the new legal challenges it currently faces. The operator has also indicated that it is exploring options of seeking a land-based casino license in Germany to continue serving the in-person gaming market.
Partypoker
Partypoker, another well-recognized online poker brand in Germany’s online gambling scene, has also introduced a range of significant changes to its poker. In a bid to continue operating within the rollover tax regulation, Partypoker has hiked its entry fee by 5.3% in its SNGs, but all the types of stakes have remained untouched.
When it comes to cash games which include ‘Fastforward’ and high-stakes events, the poker bigwig has decided to do away with $2/$5 and higher offerings for its German members. For multi-table tournaments, on the other hand, Partypoker has decided to take the 5.3% tax hit on its own, at least for the time being.
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