German e-gaming proposals would capture just 7% of market

With the 16.67% turnover tax for sports betting and the non-regulation of other products currently being proposed by 15 of the 16 German Lander unlikely to attract the majority of dot.com operators within the regulated regime, the gambling data business concluded: “H2 would expect the total gross win generated by the German interactive gambling market to be 833 million euros in 2012 growing to 957 million euros by 2015. However, it is expected that just 7.3% of this would be onshore in the former, with this rising to just 8.2% by the latter.”
 
The regulated market’s share of overall egaming activity, should the majority of the German Lander decide to proceed with the 16.67% turnover tax, would fall well short of the onshore percentages of 60% in 2012 and 65% in 2015 that would result from Germany opening all product verticals based on a 15% gross profit tax (GPT), according to H2's exclusive analysis for eGaming Review.
 
The German government’s tax take would also be 55 million euros less over the four-year term of the new State Treaty, should it opt for the turnover-based regime for sports betting rather than a 15% GPT across all products, it added.
 
bwin.party co-CEO Jim Ryan told eGaming Review last month that the 55 million euros of annual synergies the group has pledged to deliver to shareholders on an annual basis from 2012 “does not contemplate an exit in any way , shape or form from Germany.” The group saw more than a third of its share price wiped out in the week following news that 15 of the Lander were considering a restrictive opening for sports betting with a tax on stakes rather than profit.
 
Ryan's co-CEO Norbert Teufelberger has said bwin.party will apply for a license in the northern German state of Schleswig-Holstein should it proceed with plans to license all product verticals based on a 20% gross profit tax.