infoRmation panel ADULT POPULATION: ..........................65 million HOME BROADBAND: .........................80 per cent
CURRENT LEGISLATION: ..................................... Interstate Treaty on Gambling
REMOTE GAMING PERMITTED: ............................. Total prohibition on internet gambling for private operators
PROPOSED ONLINE GAMING TAX: ........................ 16.7 per cent on turnover in 15 out of 16 Länder Schleswig-Holstein: 20 per cent Gross Profits Tax
SIZE OF MARKET: ................................................ Proposed 7 sports betting licences and a limit of only one licence per Länder to offer casino or poker - Schleswig-Holstein: no limits on number of licences available
LICENCES: .......................................................... ¤250,000 fee in the first year and ¤175,000 for each additional year. Valid for 7 years during experimental phase.
TOTAL GAMBLING TURNOVER: ............................. ¤9.57bn (2009)
TOTAL (LEGAL) ONLINE GGR: ............................... ¤705 million (2008) / ¤861 million (2009)
REGULATORY BODY: ............................................ Each Länder has its own regulatory gambling authority
welcomed the approval and are showing interest in applying for a licence when the regime is up and running.
“Betfair welcomes the European Commission’s approval to the Schleswig-Holstein draft gambling law, which is a decisive step forward in the political process to modernise gambling regulation in Germany. A Betfair spokesperson commented that it is “committed to obtaining a licence in the state if the draft gambling law is passed by the state’s Parliament”. A
Bwin.Party spokesperson has made similar comments.
There is an urgent need to attempt to resolve this messy legal and political situation. The challenge for all parties going forward will be how to formulate a robust, coherent regulatory regime that satisfies the needs of political parties, 15 different Länder, monopolies (including opposition from the powerful slot machine industry lobby), and at the same time comply with European law by providing consumers with adequate protection. Leaders of Germany’s 16 Länders met numerous times in the past year, with more discussions proposed, with the aim of ironing out a deal before the New Year. Divisions have emerged between the Social Democrats (SDP) that want to maintain similar provisions to the existing Treaty, and the Christian Democrats (CDU) who are in favour of reform. Although all leaders agreed to maintain the current monopoly system for state lottery, negotiations
are ongoing on sensitive issues relating to censorship, notably to create a ‘blacklist’ of illegal websites, the role of monopolies and the limited number of licences available. These issues have the potential to be sticking points in future negotiations.
the maRket sectoRs Germany has the second largest gambling market in Europe, the first being the UK. During the past few years the market has experienced tremendous online growth particularly in casino gaming, sports betting and poker.
Now the government is looking to cash in on this growth instead of watching almost helplessly as revenues go to offshore operators. Indeed, operators go to great lengths to advertise free-to-play poker sites (with the hope and expectation that players will one day deposit real money), since the advertisement of such sites is arguably not in contravention of the Interstate Treaty. Germany’s vast legal
theRe is an uRGent need to
Resolve the messy leGal and political situation.
market was worth approximately €9.57 billion in 2009 according to the German Amusement and Vending Machine Industry Association (VDAI) and encompasses monopoly-run businesses, both land-based and online. The breakdown of market share in terms is sports betting / lotteries (46 per cent), slot machine (39 per cent), casino gaming (6 per cent), and online gambling (9 per cent or €861 million).
Although concrete gambling data figures are difficult to come by due to the current lack of official oversight within the grey market, the estimated breakdown of online gambling in terms of player activity is: 34 per cent for casino gaming, followed by sports betting at 25 per cent, poker at 18 per cent, and the state lottery at 19 per cent. According to H2 Gambling Capital, in 2008 the online GGR in the country was €705 million.
Despite the current prohibition on private operators, demand for online gambling remains strong and growing as consumers have increasingly turned to gambling on illegal websites. In fact,
Bwin.Party derived an estimated 23 per cent (€190 million) of its €827 million revenues for the full year 2010 period just from the unregulated German market - half coming from sports. Betfair earned six per cent of its revenue in the same period. None of this revenue went to state treasuries, as operators are based in offshore licensing jurisdictions including Gibraltar, Malta and the Channel Islands.
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