German Taxes Will Impact UK Gambling Industry

Germany has been making plans to change its laws concerning online gambling and the tax of this industry. These laws have an impact in the UK where the German online casino industry is a large part of their revenue.
With various parties becoming worried about the 16% tax on sports betting turnover the outcome has been a drop in shares. Betfair PLC experienced a drop due to the situation as did the recently merged Bwin party digital entertainment group. With such high taxes being levied, these companies have decided that it will not be financially viable for them to be involved in the German gambling industry.

This decision is not taken lightly since the German market makes up approximately 25% of the Bwin Party Gaming industry. This in turn means that nearly a quarter of the company's earnings before interest, tax, depreciation and amortisation (ebitda), will most likely suffer as a result of losing this market.

Before these regulations are put into place, the online gambling market in Germany has no limitations enforced on it. For the UK companies such as party and Betfair, based in Gibraltar, this means that they currently do not have to pay any taxes whatsoever in Germany.
party, discussing the proposed laws, has stated that as far as they know the tax revisions which Germany is intent on imposing, do not actually fit into the European Union laws.

The co-Chief Executive of party, Norbert Teufelberger said, "We trust that these proposals will undergo the necessary corrections so that the new regulations will govern the entire German market in a coherent and consistent manner in line with EU law."