The casino tax between profit levying and prohibition tax

Summary:

The article addresses the historical development and the legal structure of the German casino tax. The operation of casinos was first permitted in the 1930s. For regulatory reasons, a high levying of profits was intended from the start. To this day, the casino tax is up to 80% of the gross gaming revenue in some federal states in Germany. The authors conclude that the legal structure of the casino tax must be reviewed immediately. In the first place, the taxation of casinos has to be aligned to the customary taxation of companies based on the annual yield, which also factors in the high expenses of the casinos. Secondly, numerous tightenings of police- and regulatory laws have caused a massive decrease of revenue for all German casinos since 2008, without a simultaneous revaluation of the legal structure of the casino tax in view of the recent development.

The current taxation system violates the  ban on prohibition taxes enacted by the Federal Constitutional Court; a revision of the laws concerning the casino tax is essential for the German casinos to remain capable of competing.

Published in Zeitschrift für Wett- und Glücksspielrecht (ZfWG) 2012, p. 87


Authors:

Miriam Benert studied law in Berlin and London. In the meantime she focused on public and European Law. She was admitted to the Bar in 2010 and is inter alia working for the Federal Associaton of Private Casinos in Germany (BupriS). She represents the association`s concerns at national and, in cooperation with the European Casino Association (ECA), European level.

Martin Reeckmann, retired senior government official, worked for the state of Berlin from 1989 to 2002 and was, in this capacity, head of the gambling division. Since 2003, he practices law as a founding partner of the law firm Reeckmann in Berlin, specializing in gambling law. From 2007 to February 2009, he was a member of the “Scientific Forum for Gambling” (Wissenschaftliches Forum Glücksspiel), which developed the method to measure and evaluate the risk potential of gambling products. Since April 2009, he represents the interests of privately owned German casinos, first as CEO, since 2010 as executive chairman of the Federal Association of Private Casinos in Germany (Bundesverband privater Spielbanken in Deutschland e.V. – BupriS). Martin Reeckmann is recognized for his numerous publications on gambling.