The Minister Presidents of Germany's 16 states will meet this week to discuss the future of the country's gambling market, as figures released by the Ministry of Finance show an increase in tax revenue from sports betting.
According to the ministry, a total of €4.8bn was wagered in 2015 with sports betting operators who pay the country's five per cent turnover tax under the current State Treaty on Gambling, with tax revenue climbing 6 per cent to €240m from €226m in 2014. This figure includes contributions from German operators, although the majority comes from offshore online sports betting providers who voluntarily pay the tax.
However, as German Sports Betting Association (DSWV) president Mathias Dahms points out, this does not include amounts wagered via sites that do not hold an approval in the country, which could amount to an additional €2bn.
“Without a fundamental reform of the State Treaty on Gambling this market will not be stamped out,” Dahms explained.
All members of the DSWV pay the 5 per cent turnover tax, including recent additions to the association bwin Austria, Interwetten, Sky Betting and Gaming and Tipwin.
“We are pleased that we were able to accommodate four new members in recent weeks that excellently fit in our organization and strengthen the competence and experience in the field of online sports betting,” Dahms said.
“Together with our new members, we will work with politicians and authorities for appropriate and legally sound regulation of sports betting in Germany.”
The regulation of Germany’s sports betting market will be a key topic of discussion at this week’s conference of the state’s Minister Presidents. The state leaders will debate whether to fundamentally reform the State Treaty or introduce minor changes to keep it in force.
Following the European Commission’s recent ruling against the State Treaty, most observers expect it to be completely overhauled in order to stave off infringement proceedings by the European Commission.
“This stalemate can only be ended when the Treaty is fundamentally reformed,” says Dahms. “The proposal from Hesse offers a good basis for discussion. Other concepts are doomed – it does not help to stick a small bandage on a large wound.”
The other concepts Dahms refers to include proposals to make minor amendments to the existing State Treaty, as put forward by the states of Bavaria, Nordrhein-Westphalia and Niedersachsen, all of which would fail to prevent infringement proceedings by the European Commission.
“If you were to make changes to the current system, by tweaking the number of sports betting licences or granting provisional licences, Germany would simply once again be violating European laws, and licensing would continue to be blocked for years,” Dahms argues.
“The states should not go for a quick-fix solution: thoroughness should be preferred over speed. The only proposal for reform that addresses the serious concerns of the European Commission is the one put forward by Hesse. Thus the Prime Ministers can finally prove legal certainty.”