Gaming hall tax in Frankfurt to be increased
On Tuesday evening, a hotly debated topic was on the agenda of the main and finance committee of the city council: the planned increase in the slot machine tax. This decision met with fierce resistance from arcade and slot machine operators, who see their existence threatened by the tax increase. Despite the protest, the increase was passed, which leads to a further financial burden on the operators. In this article, we take a closer look at the background and effects of the new tax.
The background to the tax increase
Until now, the tax for arcade and slot machine operators was 5,5 percent of stakes. At the turn of the year, however, it will rise to 7,5 percent, which the city expects to result in a significant increase in revenue. The current 13,5 million euros will become around 22 million euros - a significant increase for the city's coffers.
Michael Stang, the second chairman of the Hessian coin-operated machine association, argued in the committee that the increase threatened the existence of many gaming halls. The industry is already struggling with numerous challenges, particularly due to the shift of gambling to the internet since the beginning of the corona pandemic. The number of gaming machines in Frankfurt has fallen by almost 40 percent. In addition, the increased minimum wage is also putting pressure on operators.
Simon Scherer, the association's legal advisor, stressed that gambling is a basic human need and that the industry has invested a lot in player protection in recent years. In regularly operated gaming halls, losses for players are limited, which Scherer said is a form of consumer protection. However, if more gaming halls have to close due to the increased tax, players could migrate to illegal gambling and thus be exposed to greater risks.
The arguments of the city and the supporters
Treasurer Bastian Bergerhoff of the Greens contradicted the operators' statements. In his opinion, the industry is by no means in decline. He explained that the number of gaming machine operators in Frankfurt was 308 before the pandemic, while today it is 312 - a slight increase that does not indicate a massive crisis. In his opinion, the increase in the tax to 7,5 percent is justified and also common practice in other cities.
Falko Görres from Die Partei took a particularly critical stance towards the industry. He strongly condemned the gaming arcades' business model and accused the operators of trying to make money from people at risk of addiction. Jutta Ditfurth from Ökolinx was also critical and described slot machines as superfluous and dangerous because they could lead to gambling addiction. She was indifferent to the operators' threats of closure: "Then close down," was her comment.
The operators' perspective and the impact on the industry
The operators argued that their financial burden was already considerable due to high rental costs and the increased minimum wage. For many operators, having to close arcades would not only be a question of profit, but would also threaten their existence. The industry is under enormous pressure, particularly due to the changing gambling landscape. More and more players are preferring online gambling, which is still relatively unregulated in Germany.
Another aspect is the concern about the impact on the players themselves. While operators claim to ensure controlled conditions in gaming halls, they fear that possible closures will cause some players to slip into unregulated areas. This would undermine player protection and, in the long term, could potentially lead to an increase in illegal gambling offers.
The decision to increase the tax on slot machine operators clearly shows the tensions between city politics and the gambling industry. While the city is counting on the additional tax revenue to possibly finance social projects or infrastructure measures, the operators are being pushed to their financial limits. Supporters of the tax increase emphasize the city's ethical responsibility to regulate access to gambling more strictly in order to protect people from gambling addiction.
Ultimately, it remains to be seen how this tax increase will affect the industry and the city of Frankfurt. What is clear, however, is that the discussion about the correct way to deal with gambling and its regulation is far from over. The conflict shows how difficult the balancing act is between the interests of the city and the livelihoods of the operators.
