Market bets against Bwin over new German rules

Poker and sports betting company Bwin.party yesterday warned that new gambling restrictions proposed by Germany would destroy competition.

The company's shares, which started trading in the FTSE 250 Index on Monday following the merger of PartyGaming and Bwin, plunged almost 15 per cent after German federal states said private firms bidding for seven national betting licences would face a 16.7 per cent tax on turnover.

Gaming industry analysts said it may be impossible to run a profitable business with duties set so high and that increasing margins would probably make odds unattractive to gamblers.

Norbert Teufelberger, co-chief executive of Bwin.party, which generates nearly a quarter of its revenues from Germany, said: "A proposed tax rate of 16 per cent on the stakes placed in sports betting would make it impossible to offer a competitive product."

Germany's federal states agreed earlier this week to open up the state betting monopoly to private companies.

Betting companies would also be allowed to advertise in sports stadiums but not on television under the proposals, which are due to be finalised in June.

Teufelberger said the proposals would turn punters to the black market.

He added: "This would mean that the proposed model would fail to meet its objectives of channelling consumer demand, offering player protection and combating fraud."