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Regional state in Germany legalizes online gaming

The German state of Schleswig-Holstein legalizes online gaming, despite resistance from the National government to protect its state monopoly.

Schleswig-Holstein became the first of Germany’s regional states to introduce legislation that will see online gaming become a legal form of entertainment. This has been done despite the national government voting to continue to restrict online gaming in the hope of protecting its sports betting and lottery monopoly.

Companies are now being invited to apply for a license to operate in the area, and successful applicants will be expected to pay a tax of 20% on operating profits. Both Bwin (which includes PartyGaming) and Betfair have already indicated there desire to be enter the German market and have advised that they intend to apply for licenses.

The German state of Schleswig-Holstein legalizes online gaming, despite resistance from the National government to protect its state monopoly.

Due to the extra tax revenues the new legislation will create for the Schleswig-Holstein public coffers, it is expected that other German states will shortly follow suit. This throws into question the National Government’s plan to introduce a new German State Gambling Treaty which would see its state monopoly protected. An estimated 2.2 million Germans already have an online gaming account with international companies, and this number is expected to rise as legal sites move into the German market.

In a statement Betfair praised the new legislation and confirmed its support for a licensed and regulated German market by saying, “Betfair is committed to participating in the online gambling market in Germany, ready and willing to pay taxes there and offer German consumers competitive, innovative and safe products. The resolution passed today is an important and groundbreaking step on the way to an open and regulated gambling market in Germany. We are now hopeful that the other 15 German States will make the regulated amendments to their proposed State Treaty, in order to bring it into line with EU law.”

Jenny McKinnley is OCA’s financial correspondent. After spending years on the trading floor in both NY and London, she offers insight from the inside out on world financial news and events.

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