Germany is one the biggest gaming liberalization holdouts in the European Union (EU). Government officials there are fighting very hard to protect their long held monopolies in sports betting and lotteries from foreign competition.
So far their plan to avoid opening gaming markets has consisted of some serious legislative foot dragging combined with astronomical tax rates for online casinos. And their plan would actually be working pretty well, if it wasn’t for those darned kids from Schleswig-Holstein (SH).
Las Vegas of Germany
Located in the northern tip of Germany, SH is mainly known for its dairy products and North Sea resort towns. But recently the state government there has been making serious waves by rebelling against the Federal government and enacting its own gaming regulations that are very friendly to iGaming.
This effort isn’t popular with the other lander and it’s just barely surviving some serious heat from the Social Democrat Party (SDP). Just last week an SDP effort to repeal the new regulations was shot down and SH is on its way to becoming the online Las Vegas of Germany.
Under the new gaming treaty, SH will allow most forms of online gaming and a casino friendly 20% tax on gross profits. This stands in stark contrast to the Federal regulations that severely limit the types of games played, the number of licenses issued, and a tax rate of 5% on all sales.These laws are more in tune with what EU regulators want to see.
Other Landers Disagree
SH is leading the way to gaming liberalization all on its own while the other 14 lander are on board with the Federal plan described earlier. Collectively they’ve waged a successful fight in German courts against gaming giant Bwin to preserve their version of the status quo.
Bwin has repeatedly sued the German government for lost profits due to unfair trade practices with mixed results. Every Bwin court victory seemed to be followed ever steeper taxes and regulations.
Germany’s iGaming Future
German government officials are fighting a losing battle when it comes to gaming regulations. EU regulators have sided with gaming companies multiple times (see: Spain, France, Denmark and pretty much every other EU country but Sweden) when it comes to breaking up gaming monopolies.
It’s possible that the politicians in Berlin know this and are just buying as much time as possible for the sake of keeping revenue flowing. Whatever their plan is, it’s going to be a loser in the long run. SH is way ahead of the gaming curve in Germany and will likely reap serious economic dividends for their early embrace of inevitable gaming liberalization.
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