Germany: Stake Tax May Push Half the Players to Offshore Websites

A potential red flag for the upcoming State Treaty on Gambling in Germany was discovered by an online survey which found out the proposed level of stake tax could push nearly half the players to offshore gambling operators.

Payout Percentage Matters

The survey conducted by Goldmedia on behalf of leading gambling operators Entain, Flutter Entertainment and Greentube, a subsidiary of Novomatic, revealed that the 5.3% stake tax approved by the new legislation could affect 49% of the players who would elect for alternative options on unregulated websites.

“The study published today shows that currently 73 to 75 percent of the regular use of online gaming is based on offers that are fundamentally different to the new regulatory requirements.”

The consulting and research group noted that out of 619 online slot players 54% ranked the payout percentage factor as the most important one with regards to their choice of gambling website. Only 31% of respondents would elect for a gaming operator based on the fact whether it is licensed or not, while just 6% of the players would base their choice on the availability of player protection measures.

“In the study, the selection preferences of the players for online gaming offers with a focus on online slots were determined. The result is that for players in Germany, payout rates are more important than a German license and the associated security aspects.”

As the stake tax rate would lead to a lower payout percentage for online slot games at regulated gaming operators, unlicensed websites which offer a better payout rate of around 98%, compared to close to 90% for the regulated market, nearly half of the player base in the country may seek products and services at unregulated gaming websites.

Moreover, the study found out that 31% of the players already play at black market gambling websites at least once a month, while 27% of the respondents admitted to using offers that do not conform to current guidelines, a finding confirmed by SEO analysis, which shows that gambling offers from unregulated operators gain significantly more hits compared to offers from licensed ones.

The proposed 5.3% stake tax has been approved by the Federal Council and only requires final approval from the legislature before it is implemented alongside the new State Treaty on Gambling which got ratified by the state parliament of Nordrhein-Westfalen and is on schedule to enter into force from July 1, 2021.

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