The expansion of commercial slot arcades in Germany is badly damaging the country's casino sector, a leading member of the industry has warned.
Gross gaming revenues at Germany’s 80 casinos have fallen by an average of 40 per cent over the last four years and, according to Matthias Hein, co-founder of the German Casino Association DeSIA and managing director of Spielbank SH, they are continuing to lose ground.
"Most severely hit is the slot business due to the vast expansion of commercial slot arcades, now even featuring casino games from our traditional slot manufacturers," he told InterGaming.
Hein, who is also treasurer of the European Casino Association, explained that more than 230,000 slots in over 60,000 locations now challenge the approximately 8,000 slots in licensed casinos.
"Slot arcades are not subject to the stringent regulations and player protection measures as are licensed casinos," he continued. "Because of federal commercial law, arcades can be set up almost anywhere. Meanwhile, they even mimic licensed casinos in appearance and some call themselves casinos."
Casinos have also been hit by a smoking ban that has not affected arcades, while online gaming - currently closed to licensed casinos in Germany - is proving to be significant competition for the land-based sector.
"In 2010, the online business in casino games, including poker, will have generated more gross gaming revenue in Germany than all German licensed casinos together - with no taxation and in neglect of all German gaming laws," Hein said. "Although doubtless illegal, there is no prosecution at all - official bodies simply refrain from tackling the unfair playing field."
Although many states have reduced their gaming taxes for casinos, several companies are finding the reductions insufficient. The political debate over the liberalisation of the market and the European Court of Justice’s request that the country brings its law into line with the rest of Europe could have a bigger impact. Amending the "incoherent" gaming law ought to tighten regulations relating to the arcade business.
"The outcome of two major legislative revisions in 2011 is vital for a level playing field and thus the future of licensed casinos in Germany," said Hein. "Their voices have to be heard during the hearing process for new legislation on commercial gaming and their consistent lobbying to open up the states’ treaty for casinos towards online gambling should finally pay off."
