EC Favors Internet Gambling in Denmark

The European Commission (EC) ruled in favor of Denmark’s internet gambling proposal by dismissing the complaints lodged against it. The Danish land casino and the Danish slot machine association initially filed the complaints.

The gist of the complaint was that they were paying gross gaming revenue taxes in excess of 45% and 71%, whilst licensed operators only pay 20%. They felt this breached State Aid rules. The EC dismissed the complaint and stated the following, “This is because the positive effects of the liberalization of the sector outweigh potential distortions of competition.”

The good news is that the Danish internet gambling proposal will be written into the law books as of the 1^st of January, 2012. From this date the first licenses will become operational. Two different licenses could be used by internet casinos. The first type is for internet and offline sports betting such as fixed, pool, spread and exchanges. The second type is for internet casinos that include poker, blackjack, roulette, slots, backgammon, whist and bridge. The state owned monopoly Danske Spil will still retain bingo and horse racing betting.

Many internet casinos operating in Europe welcomed the European Commission’s decision. Betfair is one of the internet casinos that pushed for legalization and regulation in Europe. Martin Cruddace, Betfair’s chief legal and regulatory affairs officer said that Denmark’s internet gambling regulation is a sterling example for a pan European system. It’s beneficial to Danish clients, to international internet casinos and to the Danish government. Cruddace also said that Betfair is interested in applying for a license in the country soon.

The Betsson Group which recently purchased the Danish internet casino Betsafe ahead of the pending legalization and regulation said that they were happy with how events panned out. Richardt Funch, country manager in Denmark said that the company aims to effectively market all their brands in the Danish internet gambling market. They would like to conclude sponsorship agreements with the Danish premier league and rename it the Betsafe League. He also said that the 20% tax rate levied was a tad high, but they’ll just have to work around it.

Clive Hawkswood, chief executive of the Remote Gambling Association (RGA), said that he is happy with the with the EC ruling. He justified the tax rates difference between that imposed on land based and internet casinos by saying, “In essence, land-based operations compete within physical national boundaries, whereas internet casinos are part of a highly competitive international environment, and fiscal policy should be set accordingly.” He also mentioned that those jurisdictions who aimed to impose higher tax levels on internet operations should learn from this ruling.