The High Tax in the Background Forces Poker Providers to Rethink Their Service in Austria
For professional poker players, Austria is still a paradise due to the tax exemption on winnings, which is why many poker professionals have been drawn there. Especially the capital, Vienna, is the hotspot for poker players. However, there are fewer and fewer poker rooms that still offer their services there. The reason for this is a law that has actually existed for a very long time but was simply ignored for a long time because it is very shaky in certain points. Online gambling, and this includes online poker, is legal, but it is not really regulated in Austria.
Online gambling operators offering their service in Austria have to pay a tax rate of 40% on the gross turnover, which in online poker is the rake played. Now it seems that this law has been enforced for quite some time after all, forcing many providers to discontinue their service in Austria.
Some big names, for example, are almost all skins of the iPoker network, including Betsson and Betsafe. Partypoker and Bwin are also no longer accepting Austrians, and others will almost certainly follow. Relatively new providers like WPTGlobal or JackPoker have not even begun to admit poker players from Austria.
Only the offshore poker rooms, which do not care about such laws, of course, continue to accept players from all countries, as they simply ignore such taxes. However, for poker rooms that have licenses in official countries and do not hide in some exotic countries, it is difficult.
Here is a short excerpt on the subject of taxation from the site www.oepb.at
Taxes are levied on casino providers, whether they are licensed or not. Under the VAT Act, online casino games and betting are exempt from 20% VAT. The only exception is slot machines placed outside online casinos. Different taxes are payable for each product in the current situation of online casinos.
For online casino and offline casino betting by gambling providers on the Internet, a tax of 2% is levied on all stakes in the game. For online casino gambling, the tax is 40% on the gross gaming revenue, which is the wagers minus the winnings from the gambling. There is no question about it. Some land-based casinos levy 30% on the gross gaming revenue, which is the stakes minus the winnings. The slot machines of the gambling providers in these online casinos are taxed in Austria at 30% on the net gaming revenue. This is not available for selection.
The Impact of the Tax on Poker Rooms and Affiliates
The margin is very small with such a high tax. Anyone who knows a little about the industry knows that at the end of the netrake, what matters is what a poker room and also the affiliate earns. If a player earns a high monthly rake, that sounds nice at first, of course. But what remains in the end is a completely different issue.
Let’s take partypoker as an example, which is one of the big names that has decided to no longer accept players from Austria. Let’s just say that a player generates $2,000 in rake and receives 40% rakeback. The net rake is therefore already reduced by $800 to $1,200. Now 40% tax must be paid on these $2,000, so another $800. There is currently only $400 left in netrake. But what about the transaction fees, which are still deducted, and various other bonuses from promotions? It doesn’t take a genius to understand that there is nothing left for the poker site and the affiliate.
We were also shocked to learn at GGPoker that this 40% tax will also be deducted here from now on. After an enquiry from a player who had a negative netrake, we looked into the matter and he should actually have had just under $1,000 in netrake. However, the stats showed a minus. Our enquiry with GGPoker revealed that it was the tax deduction. A very unsatisfactory situation, to be honest.
For hobby players who generate little rake, it can still be profitable despite this high tax, for the very simple reason that these players receive much less rakeback and bonuses from the promotions, which automatically leads to a higher netrake.
It remains to be seen what GGPoker will do, or even PokerStars. We will of course continue to monitor the situation closely and keep our community up to date.