German casinos: rip-off, tax, low RTP, what's behind it?
The State Treaty on Gambling has been legally binding since 2021, since legalized German online casinos have existed. However, the gaming authority is lagging behind both in verifying individual providers and in providing verified slot machines. The biggest problem lies in the attractiveness of the gaming offering, which currently only allows slot machines and sports betting. Low payout rates, the slot machine tax and the limited offer still mean that many casino fans migrate to foreign online casinos. But what is actually behind the players' dissatisfaction and how can it be justified? We looked into this to educate gambling enthusiasts.
Bets on slot machines in German online casinos
The fact that slot machines are limited to a maximum bet of 1 euro, a minimum playing time of 5 seconds and a maximum of 1000€ monthly deposit (across all casinos) is due to player protection. However, the consequences for players and casino operators have become extremely difficult. On the one hand, a player can only bet a maximum of 1 euro per spin and then always has to wait 5 seconds until another spin is possible. In addition, there is a 60-minute break in the game every 5 minutes. That alone is enough that many players no longer feel like playing in a licensed German online casino. But an even more important mango is the payout percentages, also known as RTP.
Low RTP and why does there even have to be such a tax?
Every casino must pay taxes to the state, whether it is an on-site casino, a gaming hall or an online casino. This was also the case with the previously operated, non-German online casinos (before 2021). At that time, however, this tax was recorded as a service because gambling was still illegal. Nevertheless, the state has already made a lot of money. With its own online casinos now legal, the state had to think of something new in order to continue collecting taxes, although this is hardly economically justifiable given the low stakes and limits. Therefore, the slot machine tax of 5,3% on every spin on the slot was simply introduced.
The word 'tax' basically doesn't exist in casinos because it is declared as a casino tax, which is extremely high in Germany. In general, this is 90% to 94% of gross gaming revenue (BSE) and applies equally to all areas such as slots, table games or poker. Because there are no 1-euro limits or 1000-euro deposit limits in casinos, operators are left with several million a year to cover ongoing costs, even with only a 6% profit. This excludes employees who receive their salary from a different pot.
The staff in casinos are paid exclusively by Tronc (tips). This regulation was introduced in the late 60s and still exists today.
Online casinos, on the other hand, can no longer operate economically with a profit margin of 6% to 10%. Although they don't need a location, expensive play equipment or a lot of staff, they do need to be looked at very carefully. Everyone in an online casino earns money from every player. This is not just the state, but also the gaming platform, every single provider, server, maintenance work, programmers and a few more. This means that with a maximum stake of 1 euro per spin, everyone wants a piece of the pot. Therefore, the levy of 5,3% on every spin and hence the BSE was fixed for the state.
To make this clearer, let's take Greentube games, since we know the data. The gaming fee is between 15% and 30% per spin (depending on the type of game: deluxe versions, classic versions or even Megaways), which must be paid to Greentube. Then there are the costs of the gaming platform, which are usually in the range of 10% to 15%. Ultimately, the operators, be it Jackpot Pirates or BingBong, still have to cover personnel, support or marketing areas.
So it doesn't matter whether it's real money, bonus money or free spins, the fees always apply.
Payout rates inevitably do not change
In order for the providers to still be able to work economically with a stake of 1 euro and all the requirements, a reduction in the RTP is unavoidable. If we look at the RTP in other online casinos, they are usually slightly higher than in casinos. In order to be able to effectively operate a legal German casino, the payout rates are significantly lower than those of domestic casinos.
However, this puts many players off because not only is the fun of the game extremely limited, but the prospect of winning something decent is no longer there.
