Party Poker’s parent company Party Gaming and Bwin, are currently working through the kinks of a promising joint venture to create a new site called Bwin.party. However, this potential partnership is now facing problems due to the new tax laws that have been implemented in Germany.
According to these new tax laws, those states in Germany that already have private companies who have bid for seven existing national gambling licenses would be required to pay a 16.7% tax turnover.
Bwin.party has very recently started functioning as a single unit and after this news regarding the tax turnover their shares dropped by 15%. This is not a good thing for any new venture -especially a gaming venture. Norbert Teufelberger, who is one of the co-chief executives of the new company Bwin.party has said that the gambling restrictions would probably end up destroying all the competition in this industry throughout the nation, and that this proposed tax of 16% on the stakes that has been placed in sports betting will make it close to impossible for companies to offer a competitive product.
Sports betting and gaming are very popular amongst German players, but when it comes to odds a gross margin of 16% or more would not attract players. This is because sports betting operations already generate gross margins from ten to fifteen percent and such an increase lowers the chances of profitability for the players, which is already on the lower scale.
However, the new gaming venture of Party Gaming, Bwin.party is still hoping for changes in the future and they also think that there might be a possibility that the German government may decide to drop this law in favor of the European laws and bring in a commercially stable licensing regime which will benefit all stakeholders and not favor lottery operators.
According to news reports, these restrictions have also been laid on advertising campaigns and their locations under the new proposal in Germany, which states that betting companies would not be allowed to advertise on television but they will be allowed to advertise at sports stadiums. Bwin.party’s co-chief executive said that this would mean that the new model of the product would not meet its set objectives of focusing on channeled consumer demand, and offering combating fraud or player protection. The proposal will be finalized in June.
Bwin.party continues to operate Party Poker in the way it was introduced and they are still offering their players a $100 welcome bonus at their site.

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