Danes Permit Servers To Casinos

The Danish Gambling Authority (DGA) decided that under its supervision and in “unique cases” it will permit part of a “gambling system” or servers to be located in countries or jurisdictions outside of Denmark’s bilateral agreement framework.

The revised clause states: “In special cases, the Danish Gaming Authority will permit part of an internet casino’s gambling system to be located in a country not covered by a bilateral supervision agreement in accordance with subsection 2 if supervision by the Danish Gaming Authority of this part of the gambling system can be conducted in a suitable manner.”

Senior technical adviser at the DGA, Kristian Wind said the regulator’s present State aid case – is contemplated by the European Commission has hampered the process of legalising internet gambling will decide if it will allow or not allow internet casinos’ servers to be located outside of its borders.

To which this would apply the official list of countries and jurisdictions must still be publicized, he said stating that the DGA is locked in discussions with a number of national regulators, added it would include jurisdictions “where internet casinos currently operate”.

“We explored all avenues and looked at various internet casinos as well as the ramifications it would have on these online casinos that would not be able to operate in Denmark if we only endorsed their systems to be located within Denmark,” Wind said. Wind also said that he hoped the European Commission would give an answer to the DGA before its annual August month-long break which would enable the Authority to complete its review process. If it’s successful, then only could the regulation process continue and the market open up for business to foreign internet casinos.

“Before this happens no target date has been set,” Wind added.

The European Commission (EC) has also taken into account the complaints by the Danish slot machine association and over proposed tax rates one of the country’s six brick-and-mortar casino (Royal Casino in Aarhus). They don’t support the complaint the other five said. The slot machine association and the Royal Casino argued that the projected internet gambling tax of 20% on gross win compared to the 41% they pay amounts to unfair competition.

Last year December the Danish taxation minister notified internet casinos the government aims to impose its new legislation “before next summer” as opposed to the 1^st of January planned date, and he’s positive the complaint would be solved speedily since the tax rates comply to EU law.

At the time April Carr said, senior associate in the EU & Competition Group at lawyers Olswang: “It is not easy to anticipate the time frame the Commission will take to handle this complaint because no deadline has been established yet. Should the Commission take the allegations seriously, it could take several months.”

On the contrary those EU Member States who have the prudence to put into action taxes and tax rates within their jurisdictions are subjected to “State aid” rules, which can apply if taxation levels are seen to give preferential treatment to certain commercial competitors.

Earlier this year the Danish government reassured operators that the complaint over the planned internet gambling tax rates would be resolved by June. By autumn the market would be up-and-running, unfortunately the way things stand it might only happen at the beginning of 2012.