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Germany Drafts Restrictive Proposal

Yesterday 15 of Germany’s 16 Länder agreed upon a new State Gambling Treaty. Drafted at the state premiers’ biannual summit, the bill proposes up to 20 licenses for online sports betting based on a 5% turnover tax. There is a restrictive €1,000 cap on player bets, and online poker and casino games remain illegal. German lawmakers expect the latest draft to be signed into law on December 15.

Shunning the online sports betting-only option, the country’s northernmost Länder, Schleswig-Holstein, passed more liberal legislation on September 14. The bill legalises online poker and casino games, as well as sports and exchange betting. There are also no restrictive proposals on the number of licenses issued, and the draft is based on a more favourable 20% gross profit tax (GPT).

Peter Harry Carstensen, Minister President of Schleswig-Holstein, told reporters at a press conference that “there is time enough” for Germany’s other 15 Länder to make their draft compatible with EU law. “There is a new law in Schleswig Holstein. And we created this law in a way that there is time enough to find a common solution,” he said.

Betfair said that the proposal put forward by Germany’s 15 Länder remains at odds with EU law. The European Commission issued an opinion this summer against the initial proposal backed by 15 of Germany’s 16 Länder, which called for a restrictive opening (only seven licenses) of online sports betting based on a hefty 16.67% turnover tax. According to H2 Gambling Capital, the proposal would only capture 7% of the country’s online gambling market.

The betting exchange said in a statement: “The detailed opinion of the EU Commission contained several points of contention with the original proposals which have not yet been addressed, and in our opinion the final makeup of the new state treaty in Germany therefore remains uncertain. In the meantime, we look forward to applying for an operating licence in Schleswig Holstein.”

Lobbying group the Remote Gambling Association (RGA), who has recently battled Greece over proposed legislation, was also frustrated by the decision.

“It is clear that this will have little effect in reducing the large number of German citizens gambling with operators licensed in other jurisdictions and which offer casino and poker products. Policies to restrict consumers from accessing such sites have consistently been shown to be ineffective. As such, this policy will have limited practical impact,” said RGA chief executive Clive Hawkswood.

“The European Commission has repeatedly stated that the draft State Treaty falls foul of EU law and the latest version appears to make little headway in meeting the Commission’s concerns. In fact, such an approach simply makes the Schleswig-Holstein proposal more attractive and creates a fragmented, confusing and undesirable situation for German consumers.”

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