The German Way: Life in Austria, Germany, Switzerland

CONTENTS > TRAVEL > CASINOS > CULTURAL DIFFERENCES

Casino Gambling in German-speaking Europe

Gambling casinos have a long European tradition, but much has changed in recent years.

Spielbank
There are two state-controlled casinos in Berlin. One of them, the Spielbank Berlin, is at Potsdamer Platz. (More below…) PHOTO: Hyde Flippo

All three of the largest German-speaking countries (Austria, Germany, Switzerland) have state-controlled gambling casinos, but Switzerland only began allowing casinos in 2000. Germany banned casino gambling between 1873 and 1933.

In Germany today, there is a distinction made between commercial Spielhallen (amusement arcades, slot machine parlors) and more formal state-run casinos that offer the “classic” table games (klassisches Spiel or großes Spiel: roulette, poker, blackjack, baccarat) in addition to slot machines (Spielautomaten).

Taxation
For EU citizens, gambling income is tax-free. (A fact that leads to money-laundering problems.) But German casino operators are taxed at a rate of between 45 and 80 percent (die Spielbankabgabe plus supplementary taxes), depending on the Bundesland (state). That is a relatively high rate, especially when compared to the 20-30 percent rate for casinos in most US states (except Nevada, where the tax on casinos is a ridiculously low 6.75 percent of gross revenue). However, the 16 German states earn far more money from the lottery (Lotto) and sports betting (Toto) than from casino taxes.

Austria taxes its casinos at the rate of 30 percent (reduced from 48 percent in 2010). The Swiss casino tax averages out to about 52 percent. In 2009, the total casino taxes taken in by just one of Germany’s 16 Länder (Schleswig-Holstein) amounted to 14 million euros. (That same state took in 48 million euros from its lottery.) In more populous North Rhine-Westphalia the Spielbankabgabe came to 61.5 million euros in 2009.

In Germany and Austria, casinos, lotteries and sports betting are a state monopoly. Although they usually contract private operators to run their casinos, only the 16 German states can own and operate a gambling casino. Because of this, in September 2010 the European Court of Justice (ECJ) in Luxembourg ruled that the German state monopoly on gambling was “unjustifiable” and must be broken up. The suit was filed by several foreign betting companies that want to gain a share of the German gambling market, but so far there has been no real change in Germany. Some gambling law reforms are promised by 2012, but German lawmakers have been slow to respond to the 2010 court decision. One area of great concern to casino operators is the need for better regulation of commercial slot machine parlors in Germany. They have what many consider to be an unfair advantage over state-run casinos – and cause more gambling addiction (Glückspielsucht) than casinos.

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In early 2011 EU officials openly denounced Germany for violating and ignoring trade union agreements by continuing to monopolize the gambling industry and preventing fellow EU member states from reaching the German market. However, since they derive considerable revenue from taxes on casinos, lotteries and sports betting, the 16 German states are understandably reluctant to give up their monopoly.

Kurhaus Wiesbaden
Casinos in Germany and Europe are often housed in elegant, classic structures like the Kurhaus Casino in Wiesbaden. There is usually also a small admittance charge and a strict dress code. PHOTO: Holger Reinhardt (Wikimedia Commons)

Online Betting and the EU
Most of Europe has a similar model of state-run gambling, including lotteries and sports betting, but in the UK and some other EU countries, private companies, regulated by the state, can also run casinos and betting operations, including online casinos. Unlike Germany, France recently adopted an “if you can’t beat 'em, join 'em” philosophy and moved to license private online operators and to raise revenue by taxing them. Sports betting deals have also generated big income for professional soccer teams in several European countries, but not in Germany.

Although online gambling is illegal in the German-speaking countries, each of the lotteries in Austria, Germany and Switzerland has a website. The Austrian lottery has an online site (win2day) that lets users play a scaled-down online lottery and even some casino games (poker, blackjack).

Casinos in Germany

German Casinos
Germany’s first casino was established in Frankfurt am Main in 1396. The oldest German casino still operating today, dating back to 1720, is in Bad Ems. It is one of the traditional spa casinos, indicated by the word Bad (bath, spa) in their names. Today there are about 50 casinos in Germany, most of them located in resort or spa towns. With the economic downturn, the number of casinos has dropped in recent years, with some casinos closed down completely or changed to slots-only operations. Two out of the five casinos in Saxony were closed in 2009. The three casinos left in Saxony are slots-only and stopped offering table games in 1999. Slot machines account for 75-80 percent of the revenue for German casinos.

The typical German casino (die Spielbank or das Spielkasino) may be housed in a modern steel-and-glass structure or in a classic palace, but casinos in Germany almost always share the following characteristics:

  • Two (or more) separate areas or floors for table games (roulette, blackjack, baccarat, poker, etc.) and slot machines (Spielautomaten).
  • An entrance fee and photo ID requirements. Minimum age of 18 or 21, depending on the Bundesland (18 in Berlin, 21 in Stuttgart).
  • A strict dress code. No jeans, shorts or casual attire allowed! This is definitely not Las Vegas! Many German casinos offer a jacket and tie (for a fee) to men who arrive unprepared. Most casinos allow less formal, more casual (leger) attire in the slots area.
  • Limited hours. Most German casinos don't open until noon or later. (The slots area may open a bit earlier.) Unlike 24/7 Nevada casinos, German casinos are not open around the clock and they close for certain German holidays. Closing time comes in the wee morning hours, usually around 3:00 a.m., even on weekends.
  • Although they may have bars and restaurants, German casinos are not allowed to serve alcoholic drinks to patrons who are gambling.

A few casinos also offer entertainment, but this is rare. The Spielbank Stuttgart is the only German casino located in an “entertainment center,” the SI Centrum, which offers cinemas, stage productions and restaurants. The Spielbank Berlin is next to a large theater where acts such as the Blue Men often perform. The Berlinale film festival also takes place there every February.

Alexanderplatz TV tower
The Casino Berlin, located at Alexanderplatz, recently moved from its former location in the Park Inn hotel (in background) to the ground floors of Berlin's landmark TV tower. PHOTO: Hyde Flippo - Larger view > More Berlin photos

Hard Times for Casinos
Several factors have combined in recent years to make life more difficult for Germany’s casinos. The world financial crisis, combined with the rapid growth of online betting, has caused German and European casino income to fall by as much as 42 percent between 2007 and 2010. The city-state of Berlin reduced its casino tax from 80 percent to 60 percent in 2010, in an effort to help its two casinos stay above water. Germany has lost about 10 casinos since 2007.

Other negative factors cited by casino proponents are Germany’s 2008 smoking ban, limits on advertising, and the fact that the estimated 10,000 Daddelhallen (slot machine arcades) in Germany are not subject to the same restrictions as the state-run casinos. While casinos are required to enforce age limits and charge an admittance fee, the numerous privately run slot arcades found all across Germany rarely check a patron’s age and don’t charge admission. On the other hand, critics charge that the casinos have not kept up with the times, and that is why they have lost customers. For instance, very few German casinos have taken advantage of the recent rise in popularity of tournament poker.

Casinos in Austria and Switzerland

Austria
In Austria, as in Germany, gambling operations are a state monopoly. All of the 12 state-run gambling casinos in Austria are operated as concessions by a single company: Casinos Austria AG. Most of the casinos in Austria are located in tourist and resort areas such as Bregenz, Kitzbühel, Salzburg and Baden, but also in Vienna and Graz.

Only a day after its 2010 ruling against Germany, the European Court of Justice also ruled against Austria in a similar case. The court criticized the Alpine republic for its gambling monopoly and its failure to open up casino operations to competitive bidding. Casinos Austria AG was licensed to run all of Austria’s casinos without any competitive bids. It also has gambling interests in 17 countries and on cruise ships through its Casinos Austria International (CAI) subsidiary. Once a cash cow, CAI has lost money in recent years. Casinos Austria AG also holds a 68 percent interest in the Austrian lottery.

In response to the financial difficulties faced by its casinos, the Austrian government reduced the casino tax (die Spielbankabgabe) from 48 percent to 30 percent in 2010.

Switzerland
Although it had gambling casinos in the 1800s and up until 1928, Switzerland banned casinos and wagers over five Swiss francs until 1992. At first only slot machine halls (Kursäle) were permitted. It took eight years for the Swiss cantons and the federal government to draw up laws that finally authorized real gambling casinos in 2000. After losing revenue to neighboring countries that had casinos (Austria, Italy, France), the Swiss established two kinds of casinos: A-casinos and B-casinos.

An A-casino is licensed to offer a full range of table games and slot machines. An A-casino can also network its slots within the casino and with other A-casinos in order to provide super jackpots. Usually called a Grand Casino, A-casinos are found in Baden, Basel, Bern, Lucerne, Lugano, Montreux and St. Gallen.

B-casinos are licensed for no more than three types of table games (with lower betting limits than A-casinos) and no more than 150 slot machines. B-casinos are found in Davos and St. Moritz (both where one might expect A-casinos!), Fribourg, Geneva (Casino du Lac), Locarno, Pfäffikon-Zürichsee, Schaffhausen, Zermatt and other locations.

Swiss casino
The Swiss Casino Barrière du Jura is located in the French-speaking canton of Jura. PHOTO: Casino Barrière du Jura

In keeping with Swiss cantonal independence, the rules for Swiss casinos vary by canton and region. In Davos the minimum age to enter a casino is 18. In St. Moritz the minimum age is 20. There is no entrance charge in Davos, but in St. Moritz you’ll pay 10 Swiss francs (about $10 USD) to enter the casino. Swiss casinos are operated by several different concessionaires in the three main language regions (German, French, Italian): Grand Casino Luzern, Group Partouche, Luciene Barrière, Swiss Casinos AG and others. The Swiss casino tax amounts to an average of about 52 percent of gross revenue.

Unlike Austria and Germany, Switzerland bans slot machines from bars and cafés. Slot machines are only allowed in casinos. Video touch-screen lottery machines are permitted, and the Swiss supreme court recently (Feb. 2011) sided with the Swiss Lottery after the casinos sued to block them.

There are 20 casinos in Switzerland, of which only seven are A-casinos. Although there were two nearby casinos (Baden, Pfäffikon-Zürichsee), until 2012 there was no casino located in Zurich, Switzerland’s largest city. In January 2012, Swiss Casinos Holding AG held a star-studded grand opening for its new casino in downtown Zurich, now the largest in Switzerland, adding to the firm’s existing casinos in Pfäffikon SZ, Schaffhausen, St. Gallen, Bern and St. Moritz.

The Casino Pfäffikon-Zürichsee is noted for its efforts to deal with a common complaint from German and Swiss casino operators: the negative impact of no-smoking laws. The Zürichsee casino, located in the Hotel Seedamm Plaza, has established glass-enclosed “smoking areas” for gamblers who smoke. Since May 2010, guests can light up in these special ventilated, glass smoking cabins while playing the slots or card games.

2010 Casino Robbery
On Sunday, March 28, 2010, the Grand Casino in Basel was robbed by ten masked, heavily-armed men. Shots were fired and several of the 600 patrons were slightly injured. The French-speaking thieves got away with approximately 100,000 Swiss francs, and have yet to be apprehended. (Video: News video - Swiss TV, in German)

Liechtenstein
Although it currently has no gambling casinos, the Principality of Liechtenstein passed a new law in 2010 authorizing the creation of a casino in the tiny country. According to an article in the Tages Anzeiger, Liechtenstein banned casinos in 1949, but in recent years it has lost potential revenue, particularly after casinos opened in neighboring Switzerland. Liechtensteiners can now visit at least six casinos in Austria, Germany and Switzerland, all within a 30-minute drive. Liechtenstein plans to tax casino revenue at a lower rate than the average of about 52 percent in Switzerland, probably with a sliding rate of between 12.5 and 40 percent. The government solicited applications from potential operators in March 2011. Liechtenstein is also home to an online lottery. See the box below for more.

MORE > See the related web links below.

Lotteries

Lotteries (das Lotto)
Most European countries, including Austria, Germany and Switzerland, have a lottery (Lotto) and some form of sports betting (Toto). Proceeds from the lottery usually go towards supporting cultural, educational and other good causes. Originally 90 numbers were drawn, but today most European lotteries are won with 6 out of 45 (or 49) numbers. (Italy still uses 90 numbers.)

In Austria, Empress Maria Theresia sold the rights to run the country's first lottery in 1751. Today Austria has a national lottery that even offers an online version (win2day) plus poker and other casino games. In Germany, lotteries got their start in the various dukedoms and principalities that later became the 16 German Bundesländer. To this day, German lotteries are still the province of the states (the Hessian lottery was one of the first), but they have combined into one "super" national lottery block, with numbers drawn every Wednesday and Saturday. Switzerland has two lotteries: Swisslos (German region) and Loterie Romande (French region). Proceeds from the Swiss Lottery Fund go to the cantons. Since 1995, Liechtenstein has run an online lottery called PLUS Lotto that now benefits the International Federation of Red Cross and Red Crescent Societies (IFRC).

EuroMillions lottery, based in Paris, began in 2004. Initiated by France, Spain and the UK, it is a Europewide lottery with participation by 11 European countries, including Austria and Switzerland. Similar to the US Powerball and Megamillions multi-state lotteries, EuroMillions has offered large jackpots of over 100 million euros.

The German lottery reserves 50% of its total income for paying winners. The other half is divided up among the states, with 23% going to support sports, the arts, the environment and youth projects. 16.7% goes into the states' budgets, 7.5% goes to sales commissions. 2.8% is held in reserve. There are also two "class lotteries" (a class is a month): The Norddeutsche Klassenlotterie (Berlin, Brandenburg, Bremen, Hamburg, Mecklenburg-West Pomerania, Lower Saxony, North Rhine-Westphalia, Saarland, Saxony-Anhalt and Schleswig-Holstein) and the Süddeutsche Klassenlotterie (Baden-Württemberg, Bavaria, Hesse, Rhineland-Palatinate, Saxony und Thuringia).

The minimum age to play the lottery is 18. Lottery winnings are not taxable in Austria and Germany, but they are in Switzerland. Even a non-Swiss citizen who wins the Swiss lottery must pay Swiss taxes on the amount won.

NOTE: Beware fake lottery sites!

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(A) = Austria, (D) = Germany, (CH) = Switzerland
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