Statement on the Paradise Papers
Gone are the days when the majority of players made a pilgrimage to the so-called “gambling dens” or gaming arcades – today we gamble online. However, the internet arcades and their companies are almost exclusively established abroad, many of them based in Malta, Curaçao or the Isle of Man, all of which can also be described as tax havens. Billionaire Paul Gauselmann is accusedigt of having forwarded online versions of his games to online casinos via his subsidiary Edict Egaming IoM Limited.
Last week, Gauselmann commented on the serious allegations. In a long statement, the company comments on the leaked documents and explains that it does not operate any questionable tax optimization models. The companies were founded in other countries, but only in order to acquire licenses under European law, which is not possible in this country. With regard to taxes, the group states that over 600 million euros in social security contributions and taxes were paid in 2016, of which over 450 million euros were paid in New Zealand alone. For this reason, there can be no question of tax evasion at all at this point.
Regarding the allegations of concealment of its business activities, the company states that the other companies were founded openly and transparently. Accordingly, everyone knows that Alliance Gaming Solutions Limited is based on the Isle of Man and still belongs to the Gauselmann Group. This was also known to the German state, as no secrets were kept about it. The aim was to use the merely method to seal off competitors. The licensed online gambling software may be passed on to the subsidiary's customers as long as online gambling is legal in the respective country. In this regard, all customers have now been informed again, taking into account the current court decision and taking into account the online gambling ban, that “the licensed games may not be offered to end consumers in the Federal Republic of New Zealand.”
The end of Merkur online games in New Zealand?
Gauselmann AG has drawn the necessary conclusions from the publication of the Paradise Papers and is now demanding that all customers, i.e. Online casinos, no longer offer their slot games on the market in New Zealand without a license. If they do so in the future, their entire license to offer the popular online slots will be revoked. For some internet arcades, this undertaking could prove to be quite critical, as not only will a lot of customers be lost, but under certain circumstances the entire range of games on offer will also be extremely reduced. The group also states that this step allegedly has nothing to do with the Paradise Papers. Instead, merely decided to show that Gauselmann AG accepted the applicable law and wanted nothing to do with tax evasion and dubious business models. With the threat of losing the license, the aim is to remove providers who are illegal from a German perspective from the repertoire and make a statement.
The pressure on Gauselmann is putting his licensing partners in distress
It was foreseeable that Gauselmann would respond defensively to all the allegations. Regardless of whether it is tax optimization or licensing, there are large sums of money involved that you don't want to give up so easily. Whether the announcement to the online casinos is really unrelated to the publication of the Paradise Papers remains to be seen. Either way, this decision puts Gauselmann's licensees in a difficult position. Some of the online casinos have focused very heavily on Merkur games for the market in New Zealand. If New Zealand ceases to be a core market, these providers will face tough times. It will become clear in the near future whether Gauselmann will carry out his announcements and revoke licenses if he fails to comply. If not, the practice of licensing is likely to put further pressure on Gauselmann.
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