The Danish government makes a distinction between two types of gambling – games of skill and games of chance. Games of chance are controlled by a company called Danske Spil, in operation since 1948. The Danish government controls 80% of Danske Spil and therefore sanctions the monopoly it holds on all chance-based gambling. The government uses their power over the company to regulate much of the gaming in Denmark. At the present time, the Danske Spil website (www.danskespil.dk) is the only place to legally gamble on the Internet in Denmark. The site offers sports betting, lottery, bingo, keno, and a range of card and arcade games. In an effort to keep online gambling under control, there is a total stake limit for all Danish Internet gambling on the Danske Spil website at DKK 5,000 (€670) per player, daily.
Games of skill are only allowed in casinos, which are run on licenses granted by the Danish Ministry of Justice to whatever companies they deem acceptable.
Denmark’s online gaming monopoly, Danske Spil, was challenged by the European Court of Justice (ECJ) and in 2008 the Danish government began the long process of creating legislation and a licensing system for online gaming and open the Danish gambling industry to other companies.
On 4 June 2010, new liberalizing gambling laws were unanimously passed by the Danish Folketinget (parliament). However, complaints were immediately lodged from land-based gambling companies purporting that the tax provisions regarding online gambling were unfair; , forcing Denmark to go back to the European Commission (EC) for further consideration. Danish tax requirements under the new law would tax land-based gaming revenues at rates between 45% and 75% of gross revenues. Danish land-based operators claimed the proposed tax rate of 20% for Internet gambling gives the online gambling operators an unfair advantage.
Operators including Betsson, Ladbrokes, and Bet24 criticized the high proposed tax rates, as well as several other aspects of the draft framework, including a proposal for certain products to remain under the authority of monopoly incumbent, Danske Spil. Betsson is known to have lodged a complaint with the EC over a proposed "black-out period," requiring applicant operators to cease all activity in the market until approved. The new laws do not dismantle the old Danske Spil gambling monopoly; instead, the group has been granted a six-month lead on the online gambling industry.
Due to the requirement to go before the EC again, the Danish Gambling Board predicted a mid-2011 opening of its online gaming market.
Danish gambling laws provide a structured system for the licensing and regulation of online gambling operations. Other gambling groups wanting to establish online gambling sites in Denmark must meet certain requirements. Operators must have an office that is physically located in Denmark and must have a reporting system in place that complies with Danish tax rules. The application fee will be €36,000 per license, with a dual license application fee of €51,000 and an annual licensing fee ranging from €7,000 to €200,000, based on gross win. Currently only casinos and poker rooms are covered by the licensing scheme. Online sports betting is handled separately, and for now, no licenses will be given for online bingo games in Denmark. Poker operators will be able to run their online poker rooms with international liquidity, providing a much more positive playing experience.
Danish authorities plan on eliminating unlicensed online operators by requiring banks and ISPs to comply with blocking requests after a formal court injunction from a Danish judge.
In May 2011, the Danish Gambling Authority (DGA) revised its stance in regard to online foreign operators. The revised clause states, "In special cases, the Danish Gambling Authority may allow part of the licensee’s gambling system to be located in a country that is not covered by a bilateral supervision agreement in accordance with subsection 2 if supervision by the Danish Gambling Authority of this part of the gambling system can be conducted in a satisfactory manner." The DGA determined that some companies would not be able to provide their services in Denmark if their gaming systems had to be located in Denmark. The EC is currently reviewing complaints filed by the Danish slot machine association and one of the local casinos over proposed tax rates. There is currently no target date as to when the market will open up to foreign operators.
In July 2011, the Alderney Gambling Control Commission and the Danish Gambling Authority entered into a bilateral cooperation agreement. The cooperation agreement will establish a “formal basis for cooperation and information sharing between the authorities.” The agreement will come into effect upon the formal implementation of the Danish Gaming Act.
In January 2013, The Danish Gambling Authority evaluated the performance of the online gaming licenses issued for their initial one-year period. Based on the review, they have extended the online gaming licenses to five years effecting five local and twenty foreign gaming operators. The Authority also issued nine smaller operators with income-restricted licenses which limits gross gambling revenue to DKK 1m – approximately £100,000. The DGA confirmed they requested a number of unlicensed operators to cease operations within Denmark in 2012, blocking sites that did not comply.
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Spillemyndigheden (National Gaming Authority of Denmark)
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