Schleswig-Holstein Extends Online Gambling Extension to June 30, 2021
Schleswig-Holstein passed a gaming bill last week which extends the current online gambling regulations until mid-2021. The German state’s online gambling regulations met challenges by the federal government over the last 7 years, but lawmakers on both sides of the debate continue efforts to pass a comprehensive regulatory framework.
State lawmakers in Schleswig-Holstein passed online gambling regulators in 2012. Since then, federal lawmakers tried several times to pass regulations on online sports betting services. Each attempt failed over the years.
Earlier this year, the German states passed the “Interstate Treaty on Gambling 2019“, which then was submitted to the European Commission for ratification. Approval by EU authorities is a crucial step to the Interstate Treaty becoming German state law.
Meanwhile, Schleswig-Holstein continued with its own online gambling regulations without interference from the German federal government. That framework now stays in effect at least until June 30, 2021.
Schleswig-Holstein Online Gambling Regulations
The bill passed with broad support across the political spectrum. Lawmakers from Schleswig-Holstein’s Greens Party, Free Democratic Party, the Christian Democratic Union, the Alternative for Germany, and the South Schleswig Voters Association all approved the measure.
Schleswig-Holstein allows for legal online sports betting, but also legal online casinos and poker sites. The federal treaty bans all other forms of online gambling, but allows online sportsbooks.
Lawmakers made some compromises. For instance, the previous version of the online sports betting bill limited the number of licenses to 20. That measure received criticism for being too limited, so the license number increased to 40.
5% Sports Betting Tax on Turnover
The Interstate Treaty on Gambling 2019 stipulates a blanket 5% tax on sports betting turnover. The 5% turnover tax will be the law of the land in 16 German states if the EU approves the bill.
Most regulators around the globe prefer to tax gross gaming revenues, because it only taxes the winnings. Germany wants to tax the action itself, so any bet is taxed.
Turnover Taxes or Gross Gaming Revenue Taxes?
Spain’s government tried the tax on sports betting turnover, but set the tax level at 15%. Further study showed that equated to a 46% tax on gross gaming revenues, an exorbitant tax rate. Spain currently is considering a 15% to 16% tax on gross gaming receipts.
Schleswig-Holstein’s online sports betting bill calls for a 20% tax on gross gaming revenues. While it is a high tax rate, it is still within the general level that the other 16 German states plan. Their 5% tax on turnover equates to a 16% tax on gross gaming revenues.
Schleswig-Hosltein’s Responsible Gaming Measures
Schleswig-Hosltein’s state gaming laws are progressive. The lawmakers designed the law with the idea of “harm minimization” for problem gamblers. The regulations ensure a maximim limit for entry fees and losses by gamblers.
The German state also requires operators to train staff in responsible gaming, while allowing voluntary self-exclusion for gamblers. Information on the risks of gambling addiction must be posted prominently on gaming sites. Each site must comply rigidly with reporting obligations.
Hans-Joachim Grote on Negotiations
Hans-Joachim Grote, Schleswig-Holstein’s Minister for Home Affairs, hailed the new bill as a big victory for the gambling sector and gamblers in his state. Grote said the regulatory framework assures the gaming industry receives oversight “properly, fairly, responsibly, and transparently.”
Minister Grote also nodded to the complex negotiations between Schleswig-Holstein and the 15 other German states over online gambling. Grote said, the dealmaking was conducted “with the aim of finding a common, viable solution for the entire gambling sector from 2021 onwards.”