Moreover, according to the EGBA, the proposal would be in breach of EU state aid rules.
The body suggests that the tax measure would impinge upon the competitiveness of the regulated market, and would lead to 49% of German players switching to unregulated websites, based on a new player survey published by Goldmedia.
The EGBA added that the proposal is punitive, and would result in online poker and slots being taxed at rates higher than their retail equivalent land-based casinos, which would constitute an illegal state aid under EU law. The Goldmedia survey suggests that the tax advantage for land-based operators would be as high as €290m (£250m) a year in the state of Bavaria alone.
The EGBA has, therefore, urged members of the German parliament to reconsider the proposal when it is debated in the Bundestag in the coming weeks.
“We welcome the regulation of the German online gambling market, and we fully appreciate that an online gambling tax will need to be paid,” said EGBA secretary general Maarten Haijer.
“However, we urge the German parliament to reconsider the proposed punitive rate of the tax because it will push German players to use unprotected and unregulated black-market websites and give land-based operators a massive tax advantage.
“We stand ready to share our experiences in other jurisdictions of the EU, and firmly believe that a tax level can be established which strikes the right balance between meeting the needs of the German consumer while ensuring sufficient tax revenue for the state.”
