Tax Reduction for Online Slot Games in Germany
Tax revenue from online slot machine gaming in Germany has fallen significantly in recent years. According to Welt am Sonntag, which refers to data from the Federal Ministry of Finance, revenue from this area fell to 213 million euros. In the previous year, it was 51 million euros higher. This decline continues an existing trend, as revenue had already fallen by 38,5% compared to previous years.
Experts see various reasons for the drastic decline. One of the main factors could be the strong regulation of online gambling in Germany. Since the introduction of the new State Treaty on Gambling in 2021, providers have been obliged to meet high requirements, including limiting stakes and verifying players. These measures may have prompted some players to switch to unlicensed platforms, causing the state to lose important tax revenue.
Competition from other gambling sectors could also play a role. While online slot games are declining, lottery revenues have remained relatively stable. According to the latest figures, lottery revenues rose by €40 million last year to a total of €1,8 billion.
The black market as a growing threat
Industry associations such as the German Sports Betting Association (DSWV) see the decline in tax revenues as an alarming sign. They warn that more and more players are using illegal platforms. The year before, the tax revenues declining and the trend continues. The DSWV estimates that the black market is now responsible for 30 to 40% of total gambling revenue.
This development not only has financial consequences for the state, but also negative effects on player protection. Illegal providers are not subject to any controls, which means that measures to prevent gambling addiction and protect underage players are often not complied with. In addition, there are no mechanisms to combat money laundering and other criminal activities.
Need for political action
To counteract the growing problem, experts are calling for an adjustment of the current gambling regulations. Some see the high hurdles for legal providers as a major factor in players moving to unregulated platforms. A possible solution could be a more flexible design of the rules, which both ensures player protection and keeps the legal market competitive.
In addition, increased enforcement of existing bans on illegal providers may be necessary. Closer cooperation with payment service providers and internet providers could help to block unauthorized offers in a more targeted manner.
The figures clearly show that the online slot machine business in Germany and other forms of gambling are currently undergoing major changes. While tax revenues from this sector are falling, the importance of the black market is growing. This presents the authorities with new challenges that could require a rethink of gambling policy. The coming years will show whether the current measures are sufficient or whether an adjustment of the regulations will be necessary to maintain the attractiveness of the legal market.
