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GERMAN STREET GAMING Analysis


The Glücksspielstaatsvertrag (Interstate Gambling Treaty) from 2008 states that this is to be controlled by the local states. Uncertainty about the validity of the Glücksspielstaatsvertrag, especially due to rulings from the European Court of Justice gives manufacturers of sports betting machines hope that the ruling will change in the (near) future. Therefore, there were a number of sports betting machine manufacturers exhibiting at the IMA. Politicians from the state in which the IMA takes place - North Rhine- Westphalia – took exception to this and filed for these manufacturers to be forbidden to be present at the IMA. A local court ruling decided in favour of allowing the sports betting machine manufacturers to exhibit at the IMA, just before the IMA was due to open.


IMPORTANT OPENING CEREMONY The opening ceremony at the IMA is of particular importance. In recent years, TV newsreader, Jan Hofer has moderated the ceremony. The special guest this year was Prof. Dr. Kurt Biedenkopf – a political heavyweight of the CDU (conservative) party who headed the State of Saxony as Ministerpräsident for 12 years. His speech was well received by the audience as it focused on a subject close to the industry’s heart – the challenges that commercial AWP gaming faces that is governed on a federal level in comparison with the local state-governed casino and lottery gaming.


As last year, Paul Gauselmann focused on the anomalies that face the German AWP industry and the energy that has to be invested to defend the industry. He focused on how proactive the German AWP industry is – the voluntary alcohol ban, informing players of a contact phone number if they have issues with problem gambling (this phone number is printed on every single AWP in the German market). His term ‘the curse of the good deed’ hit the nerve of the audience as the German AWP market holds together very strongly via its numerous industry associations and has close dialogue with the political landscape to ensure that AWP gaming remains fun and amusing for players.


However, the eternal struggle between federal and state politics as to the correct way forward for gaming in Germany means that the German AWP industry has been forced into a corner and has had to defend itself. If a help telephone number is printed on each and every AWP gaming screen, it stands to reason that the number of people calling the number will be higher than the total number of pathological players in the country. It is this distortion that has led to the term - ‘curse of the good deed.’


G3 I APRIL 2011 I PAGE 53


The general impression outside of Germany is that the economy is booming. The fact remains that there is a financial crisis among the majority of the local communities in Germany. Mayors up and down the country are faced with increasing local taxes and reduced spend. Tax increases include the amusement tax (Vergnügungssteuer). This tax is levied locally and so varies from community to community. Set up two new arcades in two different towns and you probably will be paying different levels of this tax. The at times ad-hoc approach by local politicians concerning this tax endangers the livelihoods of many industry participants. For example, this taxed was raised recently in Berlin from 11 per cent to 20 per cent and will be doubled in Bremen from 1st April 2011 onwards.


Another factor that is negatively affecting the industry is the allowed opening times. The norm has been to allow arcades to choose their own opening times – thus many are open 24 hours a day. The number of new large arcades at motorway rest stations has profited from this. The German AWP industry complains of attacks by the German casino industry. The casino industry is suffering from negative growth over recent years. Casino operators question whether their players prefer to now play in arcades. Casinos have a non-smoking policy and players have to show their ID when entering. This is not the case for arcades and with the higher pay-out rates now on AWPs – casino operators believe they have a case to state here. This is where the AWP industry strongly defends itself, explaining the big differences between the two forms of gaming – the average player spend per hour has fallen from 60 euros to 15 euros and the number of AWPs being played at one time has fallen from 2.6 to 1.4 machines (comparison from 31st December 2005 - thus before the new gaming regulation - and the latest figure). However, the fact that many AWP operators choose to call their arcades ‘casinos’ and such ‘casino’ signs can be seen from miles away on motorways, probably does not help the AWP cause in defending itself against casino operator criticisms.


German politicians should be looking critically at themselves too, asking why they have been allowing the expansion of the arcade market, with many multi- concession arcades in the past years, to then state that this market has too many arcades and needs to be limited. Local communities (except in Bavaria where the Vergnügungssteuer is not applied) profit from this tax, but increasingly ad-hoc rises put a real strain on the industry and can hamper growth and thus have a negative effect on tax receipts. Are


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