|Population July 2013:||81 million|
|GDP 2012:||2.48 Trillion EUR|
|GDP per capita:||28,400 EUR|
|Taxation for Lotteries:||17% on turnover (TV lotteries)|
||partially legalized, taxation: 5% on stakes|
The German gaming market is governed by a state treaty signed by the 16 regions, the Länder. Regulation and implementation of the treaty happens mostly at the regional level. However, the regional legal frameworks concerning lotteries in the different Länder are quite similar.
There are two state-owned or state controlled lotteries in Germany: the Deutsche Lotto-Toto Block (DLTB) and the Gemeinsamen Klassenlotterie der Länder (GKL). Though these lotteries market their brands nationally, they are a consortium owned by the 16 Länder. Licences are granted by each Land. The Deutsche Lotto-Toto Block (DLTB) is the largest lottery and gambling organizer in Germany. Under the GKL there are two class lotteries: the Nordwestdeutsche Klassenlotterie (NKL) in which ten Länder are represented and the Süddeutsche Klassenlotterie (SKL) in which the other six Länder cooperate. The entry into force of the new interstate gambling treaty of 2012 foresaw in the merger of these two lotteries into the Gemeinsamen Klassenlotterie der Länder (GKL), though they continue to operate under the SKL and NKL brands.
Moreover, two nation-wide TV charity lotteries are active on the market. Under the new treaty, the limit on their highest prize is € 2 million (up from € 1 million under the old treaty). Legal requirements are a minimum of 30% for prize pay-out and also a minimum of 30% for charities The Länder have the authority to grant permits for small lotteries (with prizes below € 40.000) which will operate within their region.
NEW GAMBLING TREATY AND ONLINE LEGISLATION
In September 2010 the European Court of Justice criticized the German Interstate Gambling Treaty (Glücksspielstaatsvertrag, entry into force: 2008) which contributed to its abolishment in 2012. It has been replaced by a new interstate treaty, the Glücksspieländerungs- staatsvertrag, referred to as the GlüÄndStV. While the old treaty banned the use of the internet for all gambling services (including authorised state games, but with the exception of horserace betting), the new treaty foresees in 20 national licences to be granted for online sports betting.
The new treaty has been said to create confusion and uncertainty on the German market. Upon its entry into force on July 1, 2012, the state of Schleswig-Holstein was not a signatory to the treaty, but enacted its own, more liberal laws within its territory. Schleswig-Holstein had thus already issued about 50 online gambling licences, before a change in government prompted the state to change its mind and join the interstate treaty, the GlüÄndStV. These licences will remain valid for the duration of their term, which is 6 years. The Court of Justice of the EU (CJEU) has ruled that the existence of the Schleswig-Holstein licences does not undermine the legality of the interstate treaty. In 2014, the region responsible for issuing the online licences, the state of Hesse, awarded all 20 online licences. Several operators who did not manage to be among the lucky 20, have lodged complaints. The implementation of the treaty will again be delayed, possibly several years, until all legal challenges have been settled.
Under the new treaty, Lotteries regained the right to advertise and to sell lottery tickets through the internet (e-commerce). The previous ban had already been reversed by a court ruling in 2011, when the court found that addiction to lotteries ‘essentially does not exist’. Therefore, it found that the overly stringent advertising and sales restrictions for lotteries were not justified by concerns over gambling addiction, and were also deemed inconsistent in relation to less restrictive regulation of other forms of gambling.
The gambling market of Germany is one of largest in Europe. A fairly large part of it is officially illegal. The illegal market consists mostly of betting shops and the online market. Including the unregulated online gambling segment, the total German gambling market is estimated at nearly € 11 billion in gross gaming revenue (GGR). The total market size for German lotteries is estimated at € 7.7 billion in turnover and € 4 billion in GGR.
The DLTB takes up the largest share of the lottery market, with a turnover in 2011 of € 6,258 million. The TV Lotteries had a turnover of € 601 million, and the Class Lotteries a turnover of € 416 million. There are also so-called savings lotteries, which together had a turnover of € 407 million in 2011.
Figures of the same year show that the Class lotteries spent 45-50% on prizes, and 24% (€ 99 million) went to the states in the form of taxes and profit. The TV lotteries gave 30% to prizes (the legal minimum) and gave over 40% to their charities (the legal minimum is 30%). The TV lotteries pay a 17% tax on turnover.
The Fehrnsehlotterie (formerly Ein Platz an der Sonne) is a TV lottery of the German TV channel ARD, of which the revenues are used for social projects, for example to arrange holidays for children with special needs. The lottery has existed since 1956. In 2010, turnover was € 165 million (more recent figures not found). Around 40% of revenues went to the beneficiaries, 30% represents the prize pay-out, 17% has to be paid to the state as special lottery tax and the remaining 13% are for the operation of the lottery. Legal requirements are a minimum of 30% for prize payout and also a minimum of 30% for charities. The website mentions that € 52 million went to went to 272 social projects in 2013, and increase over 2012, when € 47 million was donated to 242 projects. Since its beginnings the lottery has donated over 1.65 billion to its good causes. For more information visit: www.fernsehlotterie.de
Another charity TV lottery is Aktion Mensch. Aktion Mensch is a social welfare organisation, established in 1964 as AktionSorgenkind. It organises a lottery in cooperation with the German TV channel ZDF. Aktion Mensch strives to improve the living conditions of disabled persons and other people in special social life circumstances. This is pursued with help from the revenues of the TV lottery.
Of total lottery sales, 38% is destined for social projects, 30% is paid out as prize money, and 17% is paid to the state as lottery tax. In 2012, Aktion Mensch had a turnover of € 432 million (↓1,3%) of which € 165 million went to over 6,500 social projects. € 130 million was paid out in prize money. Every month, about 1.000 projects receive funding from Aktion Mensch. For more information visit: www.aktion-mensch.de
As far as we know, no other German lotteries exist that meet the criteria of a charity lottery. The lotteries united in the Lotto-Toto Block and the two class lotteries are mentioned below. However, these do not meet the format of a charity lottery.
The 16 different lotteries of the Lotto-Toto block support organizations in the fields of culture, sports, environment and
social projects profit from these regional lotteries. An example is the German National Olympic Committee that receives one third of its total budget from the game Glücksspirale and the conservation of monuments that received over € 100 million in 2008.
In 2011, turnover amounted to € 6,258 million. This is slightly more than in 2010 (€ 6,055 million), but nearly € 1 billion less than in 2006. For more information visit: www.lotto.de
SUDDEUTSCHE KLASSENLOTTERIE (SKL)
The SKL is a public law corporation and formed by way of a treaty between six southern German regions (Länder): Bayern, Baden-Württemberg, Rheinland-Pfalz, Hessen, Thüringen and Sachsen. The SKL was established in 1947 and organises two lotteries per year, which both last for six months.
The six Länder are, through their Ministries of Finance, the supervisory bodies of the lottery company which is physically based in Munich. The Supervisory Board is chaired by one of the six Länder for a two years term.
Almost 52% of the ticket sales is paid out as prize money, the administrative costs (including the lottery tax and the money that goes to the distribution partners) are around 20%, whereas the remaining 30% goes to the Ministries of Finance of the six Länder, being the partners in the SKL treaty. This contribution, in other words, goes into the budgets of these six regions. In 2011, turnover was € 212 million. For more information see: www.skl.de
NORDWESTDEUTSCHE KLASSENLOTTERIE (NKL)
The NKL was also established in 1947. The participating Länder are: Berlin, Brandenburg, Bremen, Hamburg, Mecklenburg-Vorpommern, Niedersachsen, Nordrhein-Westfalen, Saarland, Sachsen-Anhalt and Schleswig-Holstein.
Turnover in 2011 was € 204 million. Every year, 17% of turnover is paid in taxes to the 10 participating Länder, as is any profit. In 2011, NKL made a profit of € 5.8 million. Over 50% is destined as prize money. For more information visit: www.nkl.de