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GERMANY ABANDONS MONOPOLISED GAMBLING
Written On 4.6.11 By Jennifer Jearu :
But the downside is a slew of restrictions and heavy taxes
One of the most controversial issues in online and land gambling, the monopolised nature of the German industry dominated by the sixteen German states, has seen a dramatic change this week following a meeting of the signatories to the German Treaty.
The announcement that the German market is to be liberalised follows years of dispute and differences with the European Commission and court decisions which have recently gone against the monopoly.
But the bad news is that the liberalisation, scheduled for 2012, comes with a slew of tough restrictions:
- Lotteries will remain state-owned, however, sports betting will be liberalised
- A turnover tax of 16.67 percent will be levied
- Only seven licenses will be issued for a five-year probationary period
- Online casino licenses will only be granted to existing land operators - and will continue to be strictly limited in number. This scheme will be evaluated after five years.
- Betting on an outcome will be allowed, however, in-play betting will not be permitted
- Licence-holders will be able to advertise in stadiums and place their logos on players' jerseys, but television advertising will not be permitted
Richard Taylor, an analyst at Liberum Capital, said: "The market's reaction is understandable for those with material exposure to Germany. At these tax levels, you can be sure that the operators will now be lobbying the government and arguing that, at almost 17 percent, there will be very little tax collected as they won't be viable businesses."
The share market has initially reacted negatively to the announcement driving down shares of certain gambling groups.
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