State pockets taxes on sports betting and online casinos

On the one hand, various federal states are opposed to the legalisation of online gambling. On the other hand, taxes are welcomed with open arms. There is an interesting statistic, especially for betting: the amount of tax revenue has practically doubled within the last five years.

As far as casino games are concerned, an interim solution seems to have been found in the meantime which should regulate the operation of the web until 2024. For this year again, a more comprehensive change of the legal situation is planned. Then the third gambling change treaty is to close legal gaps.

The FDP had asked the Federal Ministry of Finance about sports betting. A corresponding answer was also submitted to the Handelsblatt. The bottom line: in the 2018 financial year, betting providers paid almost 384 million euros in taxes. If, on the other hand, we look back at 2014, it was only 225 million euros. The sports betting tax, which is regulated in the racing bet and lottery law with “five out of one hundred”, has been in place since 2012.

Sports betting stakes exceed seven billion euros per year

Bets have increased in popularity. Nowadays, players no longer only bet on games that they can watch live. That’s no problem, as the online bookmakers offer a broad portfolio of offers. So it is possible from Germany to bet on football matches in Guatemala or Tanzania. And the Germans gratefully accept this selection. It is estimated that bets now amount to seven billion euros a year. This calculation makes sense. Because with 384 million euros in taxes (5 per cent), the stakes can be extrapolated per year. But sports betting is actually in a grey area at the moment. There are no licenses, although an interim solution seems to have been found until 2024. However, this still has to be verified by the EU Commission.

High bets on sports bets are accompanied by high taxes. This is one reason why politicians have let the issue rest for a while over the past few years. There have always been proposals to ban or restrict online gambling. It has not really become concrete so far. Why should it be? North Rhine-Westphalia alone collected 90 million euros in sports betting tax in 2018. The federal state of Bavaria was able to enjoy 68 million euros. The last on the list is Bremen, where betting taxes of 3.5 million euros still flowed into the coffers. Officially, only Oddset is allowed to place bets. But the national offerer finds last rather little attention. Other gambling providers refer to a decision from Europe that the German state treaty is contrary to European law.

Taxing casino games: The fact that the respectable offerers pay taxes here likewise is to be assumed. Unfortunately, no figures are available in this respect.

Has a transitional arrangement already been found until 2024?

Hans-Jörn Arp is probably the greatest advocate of a liberal gambling solution. He acts as parliamentary managing director in the CDU state parliamentary group. He recently commented on the “Transitional Law for Online Casino Games”. First, the politician thanked the Minister of the Interior and the head of the state chancellery. Because they supported the new way. In concrete terms, Arp explained that “other federal states could also be convinced of the usefulness of such a transitional regulation”. In fact, coordination took place with addiction and consumer associations. The quintessence was a solution for the youth and player protection, with which the policy would like to go in its transition phase to the gambling.

Nevertheless, the politician from Schleswig-Holstein represents the interests of its Land of the Federal Republic likewise. Because partners from the range of the sport bets stand with the domestic associations under contract. Bet90 is currently the official sports betting partner of THW Kiel. In football, the second division team, Holstein Kiel has entered into a partnership with Bethard. The situation is similar in other federal states. The top clubs have found practically all their partners in the field of sports betting. This makes it all the more important to protect young people.

This is because they come into contact with sports betting at an early stage via football. But the fact that Arp is alluding to the fact that he has won over other federal states to the transitional regulation also means that not all prime ministers are on his side. It is not until 2024 that law will come into force that will apply to all federal states across borders.

Save server: The state is responsible for the concretisation of the gaming laws. For the casino games in the future, a server is to be furnished, which examines whether with the plays everything fair takes place. This security measure should already take effect until 2024.

The legalisation of online betting and casinos: Tax only one reason

It is clear that the federal states are happy about the income from taxes on sports bets and casinos. After all, these funds can improve the budget. But an important aspect is confirmed likewise by the addiction and consumer federations: By a strict prohibition of gambling, the customers fall back on illegal offers. The goal must be, therefore, legalisation, which makes clear regulations for the offerers. And these rules must be checked by a German authority.

The course is being set in this respect. Federal authority for gambling matters is planned for 2024. Mathias Dahms of the German Sports Betting Association (DSWV) is in favour of earmarking tax revenues for specific purposes. These should benefit the popular sport. The Bundesliga clubs profit from the advertising income. And the smaller clubs could be supported by the tax.