Yesterday, after a tense meeting of the German federal states, a compromise was ironed out between the political center and the left that was palatable to both sides.
The compromise will finally do away with the German casino monopoly, and instead replace it with seven privately owned gambling companies. The seven companies will be the winners of a soon to be held auction where the winning top seven bids (from domestic and international gambling companies) will win the coveted all inclusive gambling license.
It should have been a joyous day for the German and EU gambling industry as the German gambling market was finally opened up to free competition. Instead it was a day filled with shock, gloom and unpleasant surprises.
The new German gambling laws are considered much more oppressive than the current monopoly. The German socialist politicians, proudly following the theories of Karl Marx, produced a set of new regulations under which it‘s physically impossible for any gambling establishment to generate or remain in business.
First the German government demands that 16.6% of every bet placed with a bookmaker be paid as a tax, both on winning and losing bets – (not a tax on the sportsbook’s gross revenue, but on the bet itself). Mafia bookmakers are slapping themselves for not thinking of vigorish this high first.
The new license holders will be forbidden to accept in-game wagers on sporting events. In-game-wagers account for over 50% of the sportsbook’s revenues, and without them, it is impossible for a sportsbook to remain competitive.
Punters will simply bet on sports in Germany through organized crime operated underground sportsbooks.
Only traditional casinos and poker rooms which already have a license will be permitted to offer online casinos or online poker for five years. This in effect excludes all EU companies, since as of today, only German companies are in possession of traditional licenses. The gambling laws will allow German sports stadiums to display casino advertisements yet forbids gambling related advertisements from being shown on television.
Industry analysts predict that the new laws will only create a huge underground gambling empire controlled by organized crime while completely decimating the German casino industry.
A German gambling industry insider explains – “Players will boycott the newly licensed bookmakers and online casinos in Germany and place bets through unlicensed online or mobile gambling sites. They will go to the local beer garden and place a bet with the mafia bookmaker. Organized crime doesn’t pay taxes so the government will see a significant tax revenues drop. ”
Bwin Party Digital warned the German states that “failure to deliver a successful regulatory framework for online gaming because of a non-commercial fiscal regime will severely damage the country. A proposed tax rate of 16% on the stakes placed in sports betting would make it impossible to offer a competitive product.”
“Furthermore, excluding poker and casino products from this licensing model will continue to drive consumers into the black market. This would mean that the proposed model would fail to meet its objectives of channeling consumer demand, offering player protection and combating fraud,” stated Bwin.
Bwin, who is heavily invested in the German gambling market, saw its stock price fall nearly 25% within hours, as investors realized that the new government requirements is a death sentence to legal gambling establishments German.
Meanwhile in Moscow, St. Petersburg, Sicilly, Naples, Corsica and Turkey large groups of bulky men, with expressionless faces and cold eyes, are packing their suitcases with the one-way ticket to Berlin already reserved.