EU Considers New Online Gambling Levy: Billions in Revenue Targeted by 2029

A fiscal shift is brewing in Brussels that could permanently alter the landscape of the European online gambling market. The Brussels-based European Centre for International Political Economy (ECIPE) has put forward a concrete proposal to tap into the growing segment of online betting and digital casinos as a new own resource for the EU budget. The goal is to bolster the upcoming Multiannual Financial Framework for the years 2028 to 2034 with an additional revenue stream that presents fewer legal hurdles than a direct harmonized tax. The idea is simple: instead of infringing on national tax sovereignty, a levy would be imposed at the level of gross gaming revenue (GGR).

The urgency of this plan stems from the bloc's massive financing needs, particularly for repaying post-pandemic debts. To date, the EU has relied primarily on Gross National Income-based contributions, customs duties, VAT, and a plastic waste levy. Online gambling is now seen as an attractive target because it shows cross-border growth compared to the land-based sector and already possesses significant economic weight. The discussion is gaining momentum, as the European Commission has also prepared internal documents projecting even higher sums than those suggested by the think tank.

Numbers and facts

ECIPE's projections are based on data from the European Gaming and Betting Association (EGBA) and outline two main scenarios. At a levy rate of 3.5 percent on GGR, approximately €1.7 billion could be generated annually. Should the EU opt for a 10 percent rate, the total would rise to a substantial €4.7 billion by 2029. Of particular interest is the comparison with Commission estimates, which, according to internal papers, anticipate up to €1.9 billion per year from a 3 percent tax on net turnover, totaling roughly €13.3 billion over the seven-year budget cycle.

A key point of contention remains channelization. While industry representatives warn that higher burdens could drive players into the black market, the ECIPE report explicitly disagrees with this view.

"While it has been argued that tax increases could also lead to a shift from licensed gambling to illegal gambling, this is largely not the case, outside of problem and high-risk gamblers chasing higher payouts." - Anonymous Author, ECIPE Proposal

According to the report, unregulated operators currently account for approximately €91.6 billion of EU-wide GGR, while regulated operators stand at €36.5 billion. This discrepancy highlights the pressure already faced by legal entities.

Background

The political situation in Brussels is complex. New own resources require the unanimous approval of all 27 member states. Countries like Malta, whose economy is heavily dependent on the iGaming sector, are expected to resist additional burdens. France, on the other hand, has signaled it will not agree to a budget deal that lacks significant new own resources. The gambling levy proposal competes with or complements other ideas, such as a crypto tax that could bring in between €3 billion and €4 billion, or levies on tech giants like Google and Amazon.

The advantage of a gambling levy over a harmonized tax lies in avoiding legal complications. Since tax rates already vary widely across member states, an EU-wide levy would be a new, independent revenue stream. This might reduce resistance from some states, as national tax sovereignty remains formally untouched, even if the economic effect on operators is identical.

Why it matters for German players

For German players active in casinos licensed by the Gemeinsame Glücksspielbehörde der Länder (GGL), such an EU levy could have indirect consequences. According to the ECIPE report, Germany is one of the largest potential contributors alongside Italy and France. Since the German market is already strictly regulated by the State Treaty on Gambling 2021 (GlüStV 2021), including the €1 per spin limit on slots and the €1,000 monthly deposit limit via the LUGAS system, margin pressure for legal providers is already extremely high.

If an additional EU levy of up to 10 percent is implemented, licensed providers might have to pass these costs on to customers through lower Return to Player (RTP) rates or reduced bonus offers. Since German players are already strictly monitored, there is a risk that the price gap compared to illegal operators without a GGL license will widen. This could jeopardize the hard-won channelization rate if recreational players perceive the financial disadvantage at legal sites as too great.

What it means for GGL-licensed casinos

Operators on the GGL whitelist would face a difficult calculation. An additional EU levy would further erode profitability in the German market. Since the GGL already imposes high technical, player protection, and tax requirements, further levies could lead international groups to reconsider their investments in the German market or drastically cut marketing expenditures. It remains to be seen whether the EU Commission will design such a levy in a way that ensures highly taxed markets like Germany are not doubly penalized, preserving the competitiveness of legal providers against the black market.