Tax Plan for German Online Gambling Gets Severely Criticized

Germany is shaping its plans for virtual gaming into a more comprehensive body. Meanwhile, a new proposal raised by the country’s finance ministers causing problems. They suggested a 5.3% and 8% tax for virtual poker stakes and virtual slots respectively for all players.

The Dusseldorf Institute for Competition Economics (DICE) thinks the hiked tax rate would hamper Germany’s virtual gaming efforts. Because of the uncertainty it creates, more gamblers can shift their business underground.

The DICE’s remark comes after it gets requests to conduct research on the consequences such tax raise can induce. The DICE got those requests from the Deutscher Virtual Casinoverband and Deutscher Sportwettenverband. The financial group submitted its diagnosis, addressing that higher taxes would be unpropitious for the authorized gambling market of Germany. It has the possibility to trigger illegal gambling to spread and become larger. It would fail the government’s goal to legalize all gambling endeavors in the country.

Core Objectives Would Fail

The economic group also drew the picture of Germany’s gambling condition considering three factors. It said that with 8% slow tax imposed, the payout would become potentially smaller and it would also suppress competition. These two issues will eventually converge with players going underground and making a trifold issue. This will be a giant one and may obstacle the German rise in gambling.

The issues will destroy both the revenue possibility and the government’s opportunity to offer addiction programs and strong gambling protection. This is the second most crucial reason for the governments to legalize gambling.

Realizing the total condition shift, the DICE believes that the country’s finance ministers have come up with such tax rates without actually digging too deep. The ministers assumed that raising the amount of tax won’t evoke any changes to the country’s current gambling condition. They don’t think the volume of illegal gambling will swell for such action. However, examples already set-in other countries tell totally different stories.

Finally, the group asserted that the country didn’t need to raise its tax rate merely to ensure extra protection. The sustaining framework already covered that area providing security against addiction.