Enhanced Gambling Income in Germany: Uncovering the Reasons Behind the Rise
Unleashing Germany's Online Gambling Boom: A Closer Look at the State Treaty, Digital Slots, and Revenue
Germany's betting sector is on a roll, raking in colossal amounts for the federal and state treasuries on an annual basis. The central regions of the German states are particularly reaping the benefits of this lucrative trend.
What's fueling this tax windfall? Online poker and digital slots, in all their vibrant variety, are sending tax receipts soaring skyward.
This surge in state income from gambling taxation might initially appear puzzling. Join us as we delve into the reasons behind this cheerful cash injection.
Endless Tax Windfalls from Gambling, Explained
For the first time in history, Germany has been bagging jaw-dropping tax earnings from gambling – according to statistics from the Federal Statistical Office. The total earnings from lotteries, online poker/-slot machines, and sports betting in 2022 amounted to an astounding 2.5 billion euros. That's a staggering 10% increase compared to the previous year!
The current state treasurers are undoubtedly delighted by this development and revel in the financial boost. While we've yet to find specific details on how these additional revenues will be allocated, we do know that they will be subject to the "overall coverage principle," thereby serving the common good[6].
Contrasting the tax earnings derived from lotteries, it remains undecided how the online gambling taxes will be split between social, cultural, and sports facilities. It's reasonable to expect that gambling protection organizations will demand increased financial support in this context[7].
Decoding the Rising Tax Revenues
We find ourselves curious about the factors leading to the substantial increase in tax revenues in Germany's gambling industry. Let us guide you through these intriguing financial mysteries.
Several reasons contribute to the significant rise in tax revenues:
- The Rise and Shine of Digital Slots: The tax office has registered an impressive 126% increase in revenues in this category, topping out at approximately 428 million euros! The captivating allure of these digital games is turning heads[8].
- The Persistent Growth of Online Poker: Despite being a long-established phenomenon, online poker earnings are also surging, climbing a stunning 141% to reach 33 million euros[8]. The introduction of an online slot machine license in the 2021 State Treaty on Gambling opened up new opportunities for legalized online slot machines, explaining this trend[1].
Despite a plateau, tax revenues from classic lotteries remain high, bringing in a whopping 1.66 billion euros[9].
Sports betting, on the other hand, has experienced a slight dip, declining 8% to 423 million euros[10]. Experts had been expecting higher tax revenues owing to the football World Cup that took place at the end of 2022[11].
We attribute the central driving force behind these increased tax revenues to the gambling authorities of the states consistently granting more permits for the operation of online casinos and poker platforms. Providers deposit fees into state coffers in accordance with their respective annual turnover[12]. As long as the licensing freedoms of the GGL remain intact, the federal government and the states can anticipate further tax inflows from the gambling segment in the coming years.
Top Betting Providers on the Sports Betting Platform
It's important to note that betting provider preferences vary among players. Below is a selection of popular betting platforms that have received German licensing, catering to a wide range of interests:
- Bet365
- Bet-at-home
- Bwin
- Betano
- AdmiralBet
- NEObet
- Betway
As of February 28, 31 sports betting providers (occasionally multiple websites/brands per regulated provider) have obtained a license. In terms of slot machines, there are 31 providers currently authorized, while the number of online poker providers stands at a modest 4[13]. Not every licensed provider may be actively operational yet. Current data shows 18 sports betting providers listed on the comparison portal vergleich.org, and 13 in the slot machine category[13].
The Gambling State Treaty Explained
The Gambling State Treaty, also known as the 2021 State Treaty on Gambling (Glücksspiel-Staatsvertrag 2021), came into force on July 1, 2021, across all 16 federal states[4]. This treaty lays down uniform and obligatory regulations for the online gaming market, laying the groundwork for legal online poker games and slot machines[4].
Moreover, the treaty aims to strengthen youth and player protection, and prevent the rise of an unregulated gambling market[4].
Under the terms of the treaty, operators of online gaming platforms are required to possess a license that is linked to specific conditions. For instance, providers must employ software capable of detecting signs of gambling addiction[4].
Funding for Research and Prevention?
The allocation of lottery earnings to institutions like associations, foundations, and non-profit organizations varies significantly from state to state.
For example, the Gaming Law in Saxony-Anhalt stipulates that 530,000 euros can be spent each year on measures related to addiction research and prevention[14].
University institutions would welcome additional financial resources for research and prevention projects. It remains to be seen how the liberalized gambling market will affect these efforts[15]. A proactive strategy is preferred over a purely reactive approach by scientists.
The GGL is expected to support a revenue boost for its own budget. The authority is currently allowed to invest around 500,000 euros in research projects[16]. With the millions in revenue at stake, discussions about budget planning are likely to intensify in the near future.
To Sum Up
The wealth generated by online poker and slot machines is benefiting not only individual federal states. What truly matters is the responsible and targeted handling of the additional income.
In our view, it's essential to convene all relevant stakeholders and collaborate to develop new avenues for growth in the coming years. Indiscriminate distributions can risk disregarding the essential aspects – namely addiction research and prevention – and potentially focusing too heavily on trivial preferences.
An Important Note from Us: Gambling addiction can have disastrous consequences, including the possible loss of one's possessions. If you find yourself afflicted or recognize signs of addiction in someone close to you, you can contact the Federal Center for Health Education confidentially and free of charge at 0800 1 37 37 00.
- The surge in state income from gambling taxation, particularly from online poker and digital slots, has led to a 10% increase in revenue compared to the previous year, amounting to 2.5 billion euros in 2022 according to the Federal Statistical Office.
- The "Rise and Shine of Digital Slots" has resulted in an impressive 126% increase in revenues, reaching approximately 428 million euros, while online poker earnings have surged by 141%, totaling 33 million euros.
- The gamblings authorities of the states granting more permits for the operation of online casinos and poker platforms is a key factor contributing to the increase in tax revenues, as providers deposit fees into state coffers based on their turnover.
- Due to the gambling authorities' continued licensing freedoms, the federal government and the states can expect further tax inflows from the gambling segment in the coming years.
- The Gambling State Treaty, also known as the 2021 State Treaty on Gambling, lays down uniform and obligatory regulations for the online gaming market, paving the way for legal online poker games and slot machines, while aiming to strengthen youth and player protection.
