DVTM strongly condemns the imposition of sales tax
In a recent development, the German gambling industry is voicing concerns over the 5.3% turnover tax on online gambling, introduced as part of the new State Treaty on Gaming (GlüStV), effective from July 1, 2021. The tax, which applies to online slots and virtual table games, is causing significant controversy due to its potential impact on consumer protection, channeling customers into the regulated market, and the competitive position of licensed operators.
The Deutsches Verband für Telekommunikation und Medien (DVTM), while primarily focused on road safety, has expressed its concerns regarding the turnover tax. However, it is important to note that DVTM is not a recognised association for gambling policy. It is more likely that criticism is coming from other industry associations or stakeholders, such as the Deutscher Sportwettenverband (DSWV) or German Online Casino Association (DOCV), who are vocal about gambling tax and consumer protection issues.
The key criticisms centre around several aspects:
1. **Consumer Protection:** Critics argue that a high turnover tax puts pressure on operators to reduce payout rates or restrict offers, making regulated gambling less appealing compared to the black market. This could potentially weaken consumer protection efforts and drive players towards unprotected markets.
2. **Channeling into the Regulated Market:** If regulated operators cannot compete with black market offerings due to restrictive taxation, players may be driven to unlicensed sites where consumer protections are absent. This undermines the GlüStV’s aim of channeling consumers to regulated providers for improved protection.
3. **Competitive Edge of Licensed Operators:** Licensed operators face significantly higher costs compared to unlicensed ones, who do not bear the tax or compliance burdens. This erodes the competitive advantage of legal providers, potentially leading to a less attractive regulated market.
A summary table illustrates the impact of the 5.3% turnover tax:
| Aspect | Impact of 5.3% Turnover Tax | |--------------------------|----------------------------------------------| | **Consumer Protection** | Potentially weakened, as players may shift to unprotected markets | | **Channeling** | Less effective; black market remains attractive | | **Operator Competitiveness** | Licensed operators at a disadvantage vs. unlicensed |
A more balanced tax system, such as taxing Gross Gaming Revenue (GGR) instead of stakes, is often suggested as a way to address these issues and better align with the goals of the State Treaty on Gaming. The concerns raised by industry stakeholders underscore the need for careful consideration of the tax implications on the regulated online gambling market in Germany.
What about the potential impact of this 5.3% turnover tax on other sectors, such as finance, business, politics, and general-news? This tax could influence stakeholders in these industries, as concerns around consumer protection, channeling customers into the regulated market, and the competitive position of licensed operators may also extend beyond just the gambling industry. For instance, financial institutions might be affected by the reduced consumer spending power due to operators' need to cover increased costs, while businesses could face challenges in competing with unlicensed operators. Policymakers and media outlets may also find this topic relevant, as the tax implications and their consequences for the regulated online gambling market could have broader implications for the broader economy and society at large.