Bundestag’s Finance Committee got an earful from industry opponents of an iGaming turnover tax but also from supporters. A June 7 hearing revolved around a proposal to amend the Race Betting and Lottery Act to levy a 5.3 percent turnover tax on all online gambling.
Renatus Zilles, chair of industry association Deutscher Verband für Telekommunikation und Median, said the high tax rate will drive people to unlicensed websites. Because online gaming has high payout rates, the 5.3 percent levy is equivalent to 125 percent of gross profits, which would require operators to lessen payout rates, thus keeping players away. Zilles said this would ultimately reduce, rather than increase tax revenue from legal gambling, according to iGaming Business.
Justus Haucap of the Düsseldorf Institute for Competition Economics (DICE) said customers had alternatives to gamble using offshore operators, and using cryptocurrency.
The claims made by Zilles and Haucap were disputed.
“Online games of chance have a competitive advantage, since they operate with fewer staff and operating expenses, and are not subject to closing times,” said Thomas Eigenhaler of the Deutschen Steuer-Gewerkschaft.
