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A Balanced Take on Optimal RTP for New Turnover Taxation in Germany

Published

4 years ago

May 19, 2021

Reading Time: 4 minutes

What should be the optimal return to player (RTP)? This is a hotly debated question in the German gambling industry following the changes in the turnover taxation that are scheduled to come into force from 1 July 2021.

While several figures and many theories have been advanced, we found particular LinkedIn post by Robert Lenzhofer, Co-Founder and CEO of Hölle Games, particularly well-balanced and insightful.

We are reproducing the post with minor changes here, with permission from the author. You can find the original post here.

European Gaming Congress 2024 (Warsaw, Poland)

Over to Mr. Lenzhofer now…

I have published a LinkedIn poll recently with the title: “If/when Germany introduces the 5.3% turnover tax, what RTP rate is best suited considering both game-play and effective tax-paid?”

After one week and 120 votes from industry experts, the poll showed the following result:

There are a few ways of looking at this, but I think the key take-away is that the industry this poll represents is fairly evenly split between above 90% RTP and below 90% RTP.

The tax explained

First, to ensure we are on the same page, a quick explanation of the tax proposed:

Currently a 5.3% tax on turnover has been proposed and a draft-legislation does exist. I won’t go into the politics and the thinking behind this, but rather try to analyze the numbers.

A 5.3% tax on every bet being placed on an online slot means an operator can not offer an RTP over 94.7%. At 94.7% RTP, the operator would break even exactly on a bet-level, but obviously would lose money as marketing, employees and general operation have to be financed somehow. Considering financial overhead in any operation, that means the maximum RTP a casino is technically able to offer while avoiding bankruptcy is probably around 93% or more likely at 92%. This is the top ceiling and at the same time too high to be profitable.

Now, there is a bit of uncertainty and I’m also not entirely sure if the number to calculate against is 5.3% or rather 5.033%. The tax is 5.3% on turnover, meaning a 1 EUR bet causes a tax of 5.3 cents, which totals to 1.053 EUR. The tax-portion of 1.053 EUR is less than 5.3%. 100*5.3/(100+5.3) = 5.033 resp. 5.033%. I do calculations here in this document based on 5.3%.

How to balance RTP and profitability

We’ve established above that 93% or 92% is the top ceiling, but where is the bottom?

The table below shows how a Slots-operator will be taxed, calculated into the GGR-equivalent %-age number and cross-referenced with RTP. For reference, many other jurisdictions in Europe offer a GGR-based tax-rate of around 20%. As you can see from the table below, the 5.3% tax-rate on turnover wouldn’t be so bad, if players would accept 80% RTP. At 80% RTP, the GGR-equivalent tax-rate is 26.50% and thus a competitive tax-rate.

The coloring I have done here may be slightly biased, especially in terms of RTP so please take with a grain of salt. But if you roughly accept that the red-area you want to avoid on the RTP and on the GGR-% side, then you end up with an RTP-bandwidth between 84% and 91% to play with.

Further, and again granted you accept the coloring, an operator obviously wants to find an RTP in the green and a GGR-% in the green. Here we arrive at 88% and 89% RTP.

Now, a lot has been written that players will not accept such low RTP’s as say 84%. There are counter-arguments made that in land-based slots the RTP is exactly at that level and actually 88% is on the higher-end in land-based casinos.

On the other hand, for many market-participants the number “9” is a psychological blocker. Players, Affiliates and a couple of Slots-Studios I speak to feel very anxious offering product below 90% as this number still feels somewhat close to the industry-average of 94 to 97%. 89% sounds very different than 90%, although it is “just” 1% in RTP dropped.

Sportsbook vs. Casinos

It will be interesting to watch if Sportsbook or Sports-led brands will choose a differing RTP-rate than Pure-Play Casinos. A Sportsbook can more easily stay on a higher RTP and just pause all short-term expenses (bonus, marketing, etc.) and focus on cross-sell. A pure-play Casino will have to look a lot more closely on bottom-line and in my opinion will have a hard time offering e.g. 90% RTP-Slots as the GGR-equivalent tax-rate is 53%.

Game-Mechanics?

Will there be new Game-Mechanics invented to combat this problem? Looking at the table above again, the second column states how many spins a player on average can make until 1 EUR is spent depending on the RTP-Level. At 95% RTP this is 20 spins. Now, if a Game-Mechanic can be invented that provides a low mathematical RTP while at the same time provides a similar amount of real spins, then this could be a solution to the problem.

Conclusion

The above explanation is in no way complete – there are actually interesting studies which analyze how much an RTP is “felt” by the player and there is probably very good data the land-based industry has to offer.

But, to move away from being neutral, here’s what I personally think: The reality will be that everyone will push the RTP down and experiment with the lowest acceptable RTP as this maximizes their income. As such, come 1st of July, we’ll see a lot of RTP’s experimented with. Imagine you are a pure-play casino and you can provide a Game-Mechanic that feels good to the player and has a nice session length, while staying at or below 40% GGR-equivalent-tax. I believe things start to fall apart financially for an operator at 40% tax-rate. If you own your own media-assets and have good deals with your suppliers and run a tight operation then a 40% tax is possible to do really well in Germany. That means, the average-RTP across the portfolio will have to be around 87-88%. I think you can mix in 91% games into the portfolio just so that is part of the portfolio too, but the majority of revenue of the white-market in Germany will in my opinion come from Slots around 88% RTP. And since some games will be mixed in at 90/91% you can expected some slots to be mixed in at 84/85% rate as well.

Central Europe

Scientific Games and Polish National Lottery Continue 20-Year Scratchcard Tradition as Sales Grow

Published

3 days ago

July 24, 2025

George Miller

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Reading Time: < 1 minute

Scientific Games will continue to bring exciting instant scratchcard games to Polish National Lottery players through a new agreement with Totalizator Sportowy. Celebrating the instant lottery’s 25th anniversary last year, Totalizator Sportowy is among the top five performing instant game lotteries in Europe (La Fleur’s 2025 World Lottery Almanac). The world’s largest lottery games company has provided scratchcards to Totalizator Sportowy for more than 20 years, with scratchcard game sales in Poland growing by 20% over the past three years (2022 to 2025).

“Our goal is to give our players entertaining scratchcard experiences while responsibly generating maximum proceeds for Polish sport and culture. We are delighted to continue working with Scientific Games to offer fun, modern scratch experiences,” said Katarzyna Woznica-Borkowska, Manager of Instant Products for Totalizator Sportowy.

Most recently, Scientific Games collaborated with Totalizator Sportowy to offer Polish players the PLN30 GIGA 7 game produced with the company’s advanced Dimension technology, which enhances the play experience with three-dimensional, reflection-at-different-angle refractions above and below the game graphics.

Currently, the company provides instant games to 110 government-regulated lotteries worldwide, including more than 50 European lotteries.

“Scientific Games is honored to continue our longtime relationship with Totalizator Sportowy that we have built across two decades,” said Paul Dures, Lottery Sales Director EMEA for Scientific Games. “We look forward to continuing our work to drive meaningful growth for the scratchcard games in Poland creating more innovative and attractive games for players.”

With products that generate more than 70% of global instant game retail sales, Scientific Games is the world’s largest instant games creator, producer and services provider, and the primary provider to nine of the Top 10 performing instant game lotteries in the world (La Fleur’s 2025 World Lottery Almanac).

The post Scientific Games and Polish National Lottery Continue 20-Year Scratchcard Tradition as Sales Grow appeared first on European Gaming Industry News.

Central Europe

Number of companies and employees in German games industry falls for first time in years

Published

4 days ago

July 23, 2025

George Miller

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Reading Time: 3 minutes

After years of growth, the number of companies and employees in the German games industry declined in 2025. This was announced today by game – The German Games Industry Association on the basis of data from gamesmap.de in cooperation with Goldmedia. According to the data, the number of companies in Germany that develop and/or publish games has dropped by 4 per cent within the past year, to 910. The boom in start-ups in the games sector, which was set in motion by the introduction of the German Federal Games Funding Programme in 2020, has now completely subsided. Last year’s figures already indicated a clear slowdown. This decline was due in particular to the consolidation of the global games market and the unreliable availability of games funding to date in Germany.

Three times since 2020, there have been months-long suspensions placed on funding applications. Despite the newly registered drop, the number of companies has risen by 46 per cent overall since the initial start of the games funding programme in 2020. Of the 910 present companies, 454 work exclusively in game development and 52 exclusively as publishers. The remaining 404 companies are active in both the development and publishing of games.

‘Last year was another very difficult one for the German games industry,’ says Felix Falk, Managing Director of game. ‘Germany’s international competitiveness was further decreased by the ongoing flip-flopping of the games funding policy, which ran right into the consolidation wave that swept the global games sector. Fortunately, the new federal government has already taken the necessary steps to level the playing field for companies in this country. The future funding budget is to be increased and thus adjusted to actual needs, and applications can be submitted from August onwards. These are crucial growth impulses that are urgently needed. The additional funds will not only give companies more planning security, but also time to implement additional tax breaks for games, as set out in the coalition agreement between the CDU, CSU and SPD. The improved conditions will finally give games companies a boost, which will hopefully soon be reflected in more start-ups and the creation of new jobs.’

The number of employees at games companies in Germany has also declined over the last year. Whereas game developers and publishers employed 12,408 workers in 2024, the current figure stands at just 12,134 – a drop of 2 per cent. As with the number of companies, the employee numbers had previously shown strong growth since the introduction of the games funding programme at the federal level: a rise of 23 per cent from 2020 to 2024. The recent decline indicates that the current conditions for the games industry, which offer limited scope for planning due to the repeated funding application stoppages and significant current funding restrictions, are having an impact on the job market. A year ago, there were still more companies with ongoing projects that were internationally competitive thanks to funding at levels comparable to those in other countries – financing that had stabilised Germany’s game sector, despite the global consolidation wave and a lack of funding certainty for the industry here. The game industry secures a total of over 30,000 jobs in Germany. In addition to jobs in development and publishing, these include, for example, skilled professionals in educational institutions, the media and the public and commercial sectors.

About the data
The data is drawn from a survey carried out by Goldmedia on the basis of entries on gamesmap.de. It was conducted on behalf of game – The German Games Industry Association for the period ending on 12 May 2025.

The post Number of companies and employees in German games industry falls for first time in years appeared first on European Gaming Industry News.

Central Europe

Pro Selection – next generation casino multigame from Promatic Group

Published

5 days ago

July 22, 2025

George Miller

pro-selection-–-next-generation-casino-multigame-from-promatic-group

Reading Time: 3 minutes

Promatic Group, a Polish manufacturer of slot machines and system solutions for the gaming industry, is launching a new collection of slots dedicated to casino customers – the Pro Selection multigame. The first devices have already been certified in Poland and stood in casinos in Warsaw and Krakow.

One platform, up to 55 games

Pro Selection is software with a collection of as many as 55 different titles, covering the full functional and stylistic range of games from the Polish company’s portfolio. Players will find both classic “fruits” games – traditional and simple in form – and modern adventure games, based on an elaborate narrative and unique logics. Branded productions that stand out for their original creations and high graphic quality are also worthy of special attention.

“In Pro Selection, we wanted to include our best titles and those that have proven themselves in both the land-based and online slot segments. That’s why players will find classics such as Miss Joker, one of the most popular games at Poland’s only legal online casino, or 81 Show, a popular hat game. There are also online hits of recent months such as Pixel Fruits and Ale Cool Bober. On top of that, we have added titles that have so far only been available in land-based slot machines and have been great in them, namely Golden Train, Aladdin or Magic Ladybird Mega,” says Piotr Fedak, CEO of Promatic. – “As for branded productions, games with Mariusz Pudzianowski remain a hit, and not only in Poland”, he adds.

Variability and mathematics for every player

One of the important features of Multigame Pro Selection is the mathematical diversity of the games available in it. The collection offers games with varying levels of volatility – from low to very high (on a scale of 1 to 5 stars). As a result, the package meets the needs of both enthusiasts of long session play with frequent, smaller wins, and players looking for higher risk and high wins.

Also new to Pro Selection is a revamped user interface. An intuitive lobby, it provides quick access to all titles, convenient filtering and easy navigation – both from the touch screen and traditional buttons. This is part of software that meets the highest industry technical standards and has been certified by a Polish testing laboratory accredited by the Minister of Finance as authorized to test gaming machines.

“As a product dedicated to casinos, i.e. the most demanding B2B customers, Pro Selection is designed to be fully integrated with the SAS protocol, which is standard in this market, giving compatibility with various casino management systems and providing full operational and billing transparency. It’s a product that is ready for deployment in casino environments where reliability and control are key,” explains Piotr Fedak. – We strive to ensure that Pro Selection’s multigame always goes hand in hand with our proprietary Royal Sevens Jackpot progressive jackpot system, which in itself is a huge asset and player magnet, Fedak adds.

Ease of maintenance and energy efficiency

Pro Selection software is available exclusively on the latest casino-class slot machines from Promatic Group – that is, the Casino 27 and PRO VIP 27 and 32 cabinets These are top-quality terminals equipped with HD monitors, state-of-the-art sound systems and RGB lighting to enhance the gaming atmosphere.

“Thanks to their modular design and intuitive service menus, our multigames are virtually maintenance-free – that is, technical service friendly. Interestingly also, our energy efficiency studies have shown that compared to the competition, Promatic machines consume significantly less energy,” says Piotr Fedak. – At the moment Pro Selection is fully certified for the Polish market, and work is already underway to obtain licenses for the Czech Republic, Slovakia where our goal is to implement this 100% Polish product in those very markets, says Piotr Fedak.

About Promatic Group

Promatic Group is a Polish company with more than 28 years of experience in the gambling industry, specializing in the production of gaming machines and providing dedicated software for gaming rooms and casinos, both land-based and online. The company’s headquarters and factory are located in Warsaw and Jelenia Gora.

In Poland, Promatic’s devices can be found in Totalizator Sportowy’s legal gaming salons, casinos of the WinCasino chain and selected Casinos Poland locations. The company also operates in Latin American and African markets.

Promatic Group is certified to ISO 27001 for information security and ISO 9001 for slot machine manufacturing quality.

Since 2021, the company has also been developing its online gaming segment under the Promatic Games brand, offering online slots in regulated markets in Poland, the Czech Republic and Slovakia. It also holds B2B licenses issued by regulators in Romania (ONJN) and Malta (MGA) and plans to enter more than a dozen new markets in the next few months.

The post Pro Selection – next generation casino multigame from Promatic Group appeared first on European Gaming Industry News.