Betfair lodges complaint over German betting law

[The Buzz]

British online gambling giant Betfair filed a complaint with the European Commission over a draft of Germany's new gambling law. The company says the proposed measures are disproportionate and protectionist.

From The Wall Street Journal:

"Although the federal states claim to be opening up the market for sports betting, the current draft treaty is riddled with disproportionate, discriminatory and protectionist measures designed to keep private online operators out of the market," said Martin Cruddace, Betfair's Chief Legal and Regulatory Affairs Officer.

Betfair, which filed the complaint Friday but made the filing public Monday, criticized Germany's proposed licensing tax of 16.67% on betting turnover, which in its view "constitutes a disproportionate, unjustifiable restriction."

It said such a level was "commercially punitive and will render any competitive offer by private operators impossible."

[grem]

17% tax on betting turnover seems a bit high. This would imply less affiliate commissions involved.

[Anthony]

The German tax rates are among the highest in the world. The land based casino operators are taxed at a rate up to 80%. Crazy...

[TheGooner]

17% tax on betting turnover seems a bit high.

Seems a bit high? Understatement of the year.

Most competitive bookmakers in Europe run on a market over-round (also known as "juice" or "vig" in the US) of around 5%-8% allowing prices of 1.92 - 1.92 in order to attract bets - while outfits like Pinnacle Sport run on 4% giving lines of 1.96 - 1.96.

With a 16.67% TURNOVER TAX (not profits but TURNOVER) ... the bookmakers start with a proposition of 1.85 - 1.85 just to pay the tax take and would probably have to offer 1.80 - 1.80 lines to German customers.

That's simply not competitive, and I don't know a sports punter in the world that would think that they could regularly make profits with lines set that low.

Expect to see very few "legal" German offerings if this remains.