Wiesbaden will maintain its increased slot machine tax after the Hessian Higher Administrative Court in Kassel upheld the city's decision to elevate the rate from 5% to 7.5%, set to take effect from January 1, 2024.
The court determined that the challenges raised by gaming hall operators were without merit and validated the legality of the city's decision. According to the court’s summary, this tax adjustment is projected to generate as much as €1 million for the city.
Andreas Braun, who operates four arcades in Wiesbaden, objected to the tax increase in April of the previous year. He claimed that raising the tax imposed a ‘strangling’ burden on businesses, diminishing operator profits. He referenced a high court decision from over ten years ago, which cautioned against tax increases that could threaten livelihoods. The ruling stated, "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,"
Braun also criticized the lack of public participation in the preparatory finance committee meeting regarding the tax decision.
However, the court dismissed Braun’s concerns, underscoring that these issues did not invalidate the by-law. The judges noted that the number of gaming halls in Wiesbaden has remained largely stable following the tax hike and rejected arguments regarding unequal treatment, clarifying that local taxes apply to gaming machines while casino taxes are governed by state regulations.
This local tax is based on the expenditure on gaming machines, with city officials stating that the increase was necessary in light of financial pressures.
Though the court's ruling is not yet legally binding, the option to appeal the dismissal remains open. This will be evaluated by the Federal Administrative Court in Leipzig.
In his complaint, Braun referenced a study indicating that nearly half of the participants were considering turning to illegal gambling due to restrictive regulations. Law enforcement has recently targeted an alleged illegal online gambling operation, suspected of facilitating approximately €5.86 billion in unauthorized wagers over 30 months.
The DSWV, a trade organization representing licensed sports-betting operators, expressed general support for the crackdown, viewing it as essential due to the illegal market's expansion and the risks involved. Mathias Dahms, DSWV president, stated, "This successful investigation clearly demonstrates the scale that the illegal gambling market has now reached."
