Slump in tax revenue from virtual slot machines

The Federal Ministry of Finance publishes the tax revenues of the federal and state governments at regular intervals. It is interesting to note that the revenue from the virtual vending machine tax in May 2024 is disappointingly low compared to the same period last year. Some time ago, a considerable tax increase was forecast in this area.

In May 2024, a total of just under 15.50 million euros was collected nationwide as tax revenue in the area of virtual slot machines. In comparison: a year earlier, tax revenue in this area totalled 21.23 million euros, around 5.75 million euros more. Instead of an increase in tax revenue, the state is now having to accept a significant reduction in tax revenue in the area of virtual machine gaming. This is despite the fact that the number of licensed providers actually increased significantly during this period. Back in the summer of 2022, we at GambleJoe asked ourselves whether tax revenues from online gambling were now set to explode.

Tax revenue from virtual slot machines slumped by 27%

The Federal Ministry of Finance publishes monthly tax revenues by tax type for the whole of Germany. For some time now, the virtual slot machine tax has also been included as part of the racing betting and lottery tax. While the German state was still able to look forward to tax revenues totalling 21.23 million euros in May last year, this figure was "only" 15.49 million euros in the same month one year later. This corresponds to a decrease of 27%.

The revenue is broken down by federal state. It is striking that several federal states - Bavaria, North Rhine-Westphalia, Lower Saxony, Schleswig-Holstein, Bremen and Saarland - did not report any revenue from the virtual machine tax for May 2024. At €13.365 million, the federal state of Hesse reported by far the highest revenue from the virtual vending machine tax. The total tax revenue by tax type can be accessed online as a PDF document from the Federal Ministry of Finance here.

In 2021 as a whole, tax revenue from the virtual vending machine tax totalled 189 million euros. In the following year, it was already around 428 million euros. We reported on this in an article about the high tax revenue from German online casinos.

Why is tax revenue from virtual slot machines falling?

Various explanations are being discussed on the Internet as to why tax revenues for online slots have recently fallen so significantly. According to the CEO of Hölle Games, Robert Lenzhofer, it could be due to the fact that, statistically speaking, players are playing for a shorter period of time due to the lower payout ratio and are therefore paying less tax. We first reported on the unwelcome special gambling tax for Germany at GambleJoe in December 2020.

It remains to be seen whether this trend towards falling tax revenues from virtual slot machines will continue. If this is the case, the new Interstate Gambling Treaty (GlüStV) and its extensive player protection measures will definitely have to be scrutinised. After all, there is then a great risk that many players will have turned their backs on the legal gambling market permanently.

It will be interesting to see how revenue from the virtual machine tax and other areas of the Betting and Lotteries Act, i.e. the sports betting tax and the online poker tax, will develop in the coming months.

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