State revenue from taxes

Germany's gambling tax model is layered, with some payments levied at the federal level, some by lands (Länder) and some by municipalities. This "multi-storey" approach provides stable budget revenues and allows you to fine-tune the rules for regional features.

1) What are the state revenues

A) Race Betting & Lottery Tax

These taxes are levied on the turnover of bets (stake-based), and not on the gross gambling income of the operator:

Lotteries: Tax on bet amount (traditionally high compared to other verticals).
Sports betting: Tax on bet amount.
Online slots and online poker: from 2021 - turnover tax rates; it was he who influenced the "economy" of German online slots.

💡 Important: Bet-based model means tax is paid for each draw/bet, not "out of winnings" or "out of GGR." This makes fiscal receipts predictable and directly affects the settings of games (see the section on RTP).

B) Casino land charges (Spielbankabgabe)

Land-based casinos pay land collection (and/or profit share) on a scale tied to gross gaming income (GGR). Rates and thresholds vary by land, often progressive: the higher the GGR, the higher the effective load. This money goes to land budgets and is often partially targeted at culture, sports, social programs.

C) Municipal taxes on machines (Vergnügungssteuer)

Municipalities levy a tax on entertainment machines (including in-hall gaming). The base and methodology (by turnover, by time, by quantity) vary by city/community. For local budgets, this is a significant source of regular income.

D) Corporate taxes

In addition to "special" industry taxes, operators pay standard:

Corporate income tax and trade tax (their combination forms a corporate burden depending on the municipality).
VAT (USt): Most gambling is exempt from VAT, but related services (hotel, F&B, events) are taxed on a general basis.

2) Who gets paid

Federal level: income from betting taxes (lotteries, sports, online slots/poker).

Land level: casino fees (Spielbankabgabe), part of fines/royalties, targeted deductions for sports/culture/social programs.

Municipalities: Automata tax (Vergnügungssteuer) and accompanying local fees.

Thus, financial flows are distributed along the vertical of power, which makes it possible to support cultural, sports and social initiatives not only from the federal, but also from regional budgets.

3) How taxes affect product and RTP

Online betting turnover tax (slots/poker) makes German game configurations noticeably more cautious:

RTP is lower than international versions (often the corridor ~ 90-95% instead of the "classic" 96-97%) so that the operator can "take out" the tax burden.
The ban on accelerators and the limit of 1 € per spin enhance the effect of the "slow" market: fewer rounds played → more stable tax collection from each bet.
The lack of progressive jackpots and "bonus buy" additionally "smoothes" the variance and makes revenue (and tax) more predictable.

Offline, land fees with GGR push casinos to diversify their income: events, gastronomy, hotels - that is, to a more "resort" model, where taxes are paid not only as "gaming" ones.

4) Where funds go: typical priorities

Although exact proportions vary by land/city, traditional destinations are:

Culture and sports: financing of federations, communities, events, infrastructure.
Social programs: prevention of addictions, research, support for NGOs.
Tourism and urban environment: events, lighting, transport hubs, landscaping in resort cities and tourist centers.
Supervision and compliance: content of regulatory functions, market monitoring, combating illegal offers.

5) Example of a "money route" (simplified)

1. The player bets 1 € in the online slot.

2. The operator withholds federal tax (base rate) from circulation. , then - payments to the content provider, operating expenses.

3. The total margin is reflected in the financial result of the company → corporate taxes (profit/trade) are charged.

4. In nazem: GGR casino is subject to land tax, in parallel the municipality receives tax on machines (for halls).

5. The money is distributed among budgets of different levels and, depending on the rules of the land/city, partially targeted goes to sports, culture, social projects.

6) Why the system is considered sustainable

Wide taxation base: different verticals are covered - from lotteries and bets to casinos and halls.

Predictability of revenues: the "rate tax" model gives a stable flow even when margins change.

Regional fine-tuning: land/cities can vary collection rates and spending directions for local tasks.

Strict supervision: licensing, KYC/AML, centralized limits (LUGAS), self-exclusion (OASIS) support the "white" segment and, therefore, fiscal sustainability.

7) Risks and discussions

Demand channeling: too high a cumulative load can take some players to unlicensed online; balance is important.

Land differences: Disparate land rates/rules create a "mosaic" of conditions for land-based casinos.

Content provider economics: With an increased tax burden, developers optimize math (RTP/volatility), which changes user expectations.

8) Quick fact checklist

Germany levies turnover rates for lotteries, sports, online slots and online poker.

Land casinos pay land fees with GGR on progressive scales (vary by land).

Municipalities receive automata taxes (Vergnügungssteuer).

Game winnings for the player are generally not subject to income tax; the tax burden falls on the operator/rate.

Online, the tax model directly affects RTP and pace (along with regulatory restrictions).

State revenues from gambling in Germany are formed at three levels - federal, land and municipal - and are based on different bases (rate, GGR, machines, corporate taxes). This architecture gives the budget sustainable billions of dollars in revenues, while supporting culture, sports and social programs. The price of sustainability is stricter rules and a "slow" product online, but this is what keeps the market in the legal field and provides predictability for the state and society.