Wiesbaden's increase in the slot machine tax will remain intact following a ruling from the Hessian Higher Administrative Court in Kassel, which upheld the city's decision to raise the tax from 5% to 7.5%, starting January 1, 2024.
The court's statement indicated that the judges dismissed objections from gaming hall operators, asserting that the city’s decision was legally sound.
According to the court's summary, this measure is projected to generate up to €1 million in revenue for the city.
Concerns about a 'strangling' effect were raised by Andreas Braun, who operates four arcades in Wiesbaden. He lodged an objection and a constitutional complaint against the tax hike in April 2022, claiming that the increased tax would severely harm businesses by eroding operator profits.
Braun referenced a prior high court ruling which stated that tax increases must not reach a level that endangers livelihoods. The ruling highlighted that, "If the tax burden alone makes it impossible to establish the occupation of slot machine operators as the economic basis of one’s livelihood within the municipality…,” such increases could be deemed unacceptable.
Additionally, Braun contended that the public had been improperly excluded from a preparatory finance committee meeting.
In response, the court stated that this procedural point did not undermine the by-law's validity and pointed out that there was no evidence indicating the tax would suffocate businesses. The judges noted that the number of gaming halls in Wiesbaden had remained relatively stable even after the tax increase.
The court also rejected the claim of unequal treatment, clarifying that local gaming machines are taxed differently from casinos, which are under Hesse’s jurisdiction. The city's tax is imposed on expenditures related to gaming machines and is viewed as part of the municipality's broader strategy to address financial pressures.
While this ruling is not yet legally binding, there remains a possibility for the applicants to appeal the rejection of their plea. This appeal will be evaluated by the Federal Administrative Court in Leipzig.
Additionally, Braun mentioned a study indicating that nearly half of respondents were inclined to use illegal gambling services as a result of these legal restrictions.
Recent weeks have seen German authorities crack down on an alleged illegal online gambling network, believed to have facilitated wagers amounting to approximately €5.86 billion over a period of 30 months.
The DSWV, an association representing licensed sports-betting operators, welcomed this enforcement as critical in light of the burgeoning illegal market and its associated risks. Mathias Dahms, president of the DSWV, stated, "This successful investigation clearly demonstrates the scale that the illegal gambling market has now reached."
