German betting tax explained

In Germany, sports bets are subject to the sports betting tax (Wettsteuer) under the Racing Betting and Lottery Act (Rennwett- und Lotteriegesetz). Since July 2021 it has been 5.3 per cent of the stake (previously 5 per cent). The bookmaker is liable for the tax and pays it to the tax office. How it passes the tax on to its customers is up to the bookmaker. Winnings from sports betting, on the other hand, are generally not subject to income tax for private individuals in Germany.

Three ways of settling it

1. Priced in: The bookmaker deducts nothing visibly; the tax is contained in slightly lower odds. To you it looks like a tax-free bet, but the odds are worse than they would be without the tax.

2. Deducted from the stake: 5.3 per cent of your stake is withheld and only the rest is bet. Alternatively, you pay the tax on top of your stake.

3. Deducted from winnings: The tax is only deducted from the payout on winning bets. Losing bets cost no additional tax.

Tax and accumulators

The tax relates to the stake, not to the number of selections. With an accumulator, it is therefore only charged once. That does not change the fact that the margin multiplies with every selection. For system bets, the total stake of all lines counts.

Tax and margin together

For everyday calculations, the tax acts like an additional mark-up. On a bet with a 5 per cent margin and 5.3 per cent tax, only around 90 cents per euro remain on average. That is why, in the long run, betting is a losing proposition for most players.