Betsson folds poker offering in Germany following tax changes

Major poker operators are deciding whether to alter or scrap online poker in Germany following the implementation of strict tax laws. A new 5.3% turnover tax on online poker approved by the German Bundesrat came into effect on 1 July and has seen Betsson, GGPoker and partypoker all shift their strategic outlooks. Betsson, which uses Playtech’s iPoker Network, has elected to pull the vertical entirely. In an email to affiliate partners, Betsson said: “Unfortunately, we have to inform you of the closure of our poker product in the German market due to the new turnover tax of 5.3%. “We will review the viability of offering poker to our German customers in the future.” Additionally, Betsson has also chosen to make changes to its rev-share strategy for affiliates after confirming it would no longer be able to honour its existing agreements with partners. The email continued: “The German regulator has made any commission payments based on player revenues illegal. We are therefore forced to work exclusively on a CPA basis with our affiliate partners. “We have also reviewed our obligations towards existing rev-share agreements and unfortunately it is inconclusive if the regulator will allow us to keep honouring these. “Our legal teams have therefore advised us to put all rev-share payments on hold until we have more clarity on the legal situation in the market.” Partypoker said it would make two major changes to its poker offering in Germany following the regulatory changes. Firstly, it will discontinue some of its high stakes poker games, including cash games with stakes from $2/$5 and above and fast-fold variant games, Fast Forward, with stakes from $2/$5. The Entain-owned brand also said it would add a 5.3% buy-in fee for sit-and-go tournaments to cover the new tax. “With the new legal basis, it is our goal, as a leading provider in the slots and poker area, to keep our offerings attractive and competitive,” said partypoker. “In view of the legal situation, we are choosing the most player-friendly way to implement this legally required change.” Elsewhere, GGPoker said it would no longer offer VIP cash games or high-roller tournaments: “Unfortunately, as the whole online gaming industry agrees, some of the limitations are poorly designed to achieve player protection goals and the taxation imposed to licensed operators is excessive. “In particular, the tax for poker was duplicated from other games [online slots] with no effort to understand how poker works. “We’ll have to remove the games that under this tax regime make no sense for players to play from Germany and make no sense for us to offer under that licence.” While regulation allows poker players to play in global liquidity pools rather than ringfencing the market, the tax rate makes the situation almost untenable. PokerStars stated in a blog post last week that if a player sits down with €100 in a cash game, the site has to pay the Germany government €5.30. The online giant has raised the rake in the market, meaning German players pay more commission on winning pots than overseas players seated at the same online table.