Casinos pay taxes

This is how much money the state earns every year from gambling taxes

The Germans' passion for gambling is unbroken. Despite the introduction of various taxes and duties that the players have to reckon with, sales continue to rise in these years. But how much money does the state actually earn with the brave soldiers of fortune? And how does the general public benefit from the money?

The type of revenue

Indeed, gambling in Germany is booming in various forms. The classic lottery is still popular, and due to the large turnover it has been made a government issue. The one-armed bandits, which were to be found in numerous pubs until a few years ago, are also known. In the meantime, slot machine games, as shown on this website, have moved to the Internet. The state took advantage of this steady turnover to generate another tax source.

In order not to reduce the attractiveness of the game of chance, the fees are often only recognizable at second glance and are sometimes hidden from the eyes of the players. Because while they do not have to pay tax on their first big profit, the providers pay a fee of around five percent before the payout. In the meantime, a very diversified tax model has been established in this area, which primarily consists of the following pillars:

  • Lotto - Lottery levy of 20% of the stake
  • Race bets - 5% of the stake
  • Sports betting - 5% of the stake
  • Slot machines - amusement tax - calculated at the state level

These points already reveal an extensive network of income, which also applies in the same form to offers from the World Wide Web. It is no longer possible for bookmakers and casinos to escape the tax if they want to obtain one of the coveted EU licenses. Due to the great boom that the industry has experienced in recent years, of course the annual income of the state continued to rise. In the area of ​​slot machine games alone, the tax authorities earned 1.12 billion euros in 2016. Added to this are the various income from the other games of chance, which are estimated at 1.67 billion euros.

Enrichment at the expense of the citizens?

Basically, it is discussed with these figures which moral aspects are hidden behind them on the part of the state. On the one hand, campaigns and regulations draw attention to the fact that games of chance are addictive and can lead to the gambler's financial ruin. On the other hand, the state earns enormous sums of money year after year with precisely this vice, which it would not be so easy to do without. At this point, too, one can rightly speak of a double standard in which different official bodies play against each other. Otherwise it would not be possible to pursue two contrary goals and put them at the center of one's own activities, as is currently the case in Germany.

The distribution of the money

But where does the money that has been earned through gambling go to? In fact, it is not possible to see individually where the tax money of the casinos and bookmakers is going. Eventually they end up in the general control pot, where their track is lost in the sequence. Nevertheless, these sums are also in our infrastructure, our schools and our official bodies, as is the normal income tax out of the pocket of every citizen.

It would certainly be worthwhile to discuss the introduction of the Finnish model as well. When the Finnish state noticed that gambling income was mounting, it was primarily seen as a red flag. Although this did not lead to an immediate ban on the games, it was enough reason to think carefully about the investment path. Since then, the annual income from gambling in Finland has also been invested in prevention measures aimed at reducing the risk of gambling addiction. While the German state really relies on getting the players to take on new stakes, in Scandinavia they follow a very long-term and plausible approach.

Dispute over the monopoly

Added to this are the perpetual disputes surrounding the current regulation of the gaming market. Here the state has a central position in an entangled oligopoly. This means that apart from the official providers, only 12 private companies have the chance of getting a permanent license. However, this contradicts the laws of the free market, which otherwise apply in Germany without restrictions. More and more online casinos and bookmakers are therefore forced to have their offers regulated by other EU countries and to make them available to German citizens as well. On the one hand, this creates a legal gray area in which it is very difficult to follow legal principles. On the other hand, the state loses a lot of tax revenue in this way too, without the gambling in the country being curbed. Because the taxes flow to countries such as Malta or Gibraltar, which still offer providers the opportunity to set up their headquarters there. With regard to the concessions, too, this is a tricky legal situation which, at least at the moment, cannot be classified as satisfactory.

The right regulation

But it is precisely this regulation that is of great importance to ensure the safety of all players. Because it is only on this basis that certain laws are adhered to, which are indispensable for the safe use of various games of chance. This includes that players under the age of 18 do not have access to the offers and certain measures for the prevention of gambling addiction are also observed here. On the other hand, it is important that the risk of money laundering is also minimized, which unfortunately often comes from online casinos. Only under the condition that it is again possible as a private provider to legally obtain a license in Germany will further steps be taken in this area. Until then, we can only hope that those responsible will gain some insight.

All in all, gambling is currently in an awkward position. Too many contradictions stand in the way of an orderly process, so that an effective use of tax money is also out of the question. While other countries have already managed to strike a healthy balance between tax revenue and security for their citizens, many questions remain unanswered in this country. It is therefore to be hoped that further progress will be made with the relevant regulations, which will lead to positive results in the long term.