Tax every pot: new German law could end online poker

Jon Pill
Published by:
Posted on 01/11/2021

The landscape of regulated online poker in Germany is already looking pretty different. Though the regulations don’t kick in until midway through 2021, sites are already complying as much as possible with the new rules.

Players can’t table-select, for example. A fact which has riled up the whale sniping crowd no end. Since other players in the same pool are not limited in the same way, it puts the German players at a significant disadvantage. Until everyone moves over to RunItOnce or PokerStars’s “active wait” list.

The deposit limits of €1,000 per day have got a lot of higher stakes players worried. Ditto for lower stakes players in high-volatility games.

But there is new feature in the works that could kill online poker stone dead in Germany. A draft law, made available to the Süddeutscher Zeitung levies “taxes of 5.3% for online poker games and a “virtual machine tax” of 8% on the use of slot machines. The tax would be levied every single time the virtual reels spin, i.e. eight cents per euro wagered. [Translated by Google translate.]”

This suggests that the tax will be applied not to net winnings, but to every Eurocent that is bet. Because a buy-in at a poker table can be wagered many times over, this can mean a tax bill that far exceeds the size of the stack that generates it.

The Swedish connection

The German lawmakers should probably have looked to the north, where their Baltic neighbors tried a similar tactic and (thankfully) realized their gaffe.

The wording appears to suggest Germany is in the process of making the same mistake Sweden made a decade or so ago. The Swedish Skatteverket (the Swedish tax authority) attempted to collect taxes of 30% on every pot played by a Swede on sites outside the E.U.

The result was that when PokerStars release Victor “Isildur1” Blom’s real identity in 2011, the Skatteverket came after him. A year of playing tens of thousands of hands in the highest stakes games online had left Blom down the equivalent of $2.5 million. His tax bill for operating his “business” at such a loss? $150 million.

The numbers were so absurd that Sweden was forced to overhaul the relevant rule. Whether Germany will be as flexible remains to be seen after their tax year ends next December.

The 5.3% per pot tax is substantially less than the 30% the Swedes hit Blom with. But it’s makes the rake unmanageable. And unlike rake which is removed at the time, there’s no immediate feedback on how fast your tab is running up.

The tax, which would kick in along with the rest of the online poker regulation on July 1st, 2021, is enough to ruin the game for recreational players. But for a pro, that kind of vig is career-ending.

Hopefully, lawmakers will run it past a poker player before finalizing the wording. In needs looking at by someone who can tell their Asse from their elbows.

Featured image source: Flickr