Like many European countries, Denmark’s road to a liberalized online gaming market was slowed by the presence of a state-owned gambling monopoly. For years, Danske Spil,, in operation since 1948, controlled both land-based and online gaming in Denmark. The Danish government controls 80% of Danske Spil. When Denmark moved to a liberalized online gaming marketplace in 2012, Danske Spil retained its monopoly over lottery, bingo, keno, and a range of card and arcade games.
Denmark began its move toward liberalization in 2008 when Danske Spil’s monopoly was challenged by the European Court of Justice (ECJ). After the challenge, the Danish government began the long process of creating a licensing and regulatory system that would open the online gaming market to other companies.
In June 2010, the Danish Folketinget (parliament) adopted legislation that would open up the online gaming market. But the law was challenged by land-based gaming companies because online gaming companies were being taxed at a lower rate than land-based operators. Danish tax requirements under the new law would tax land-based gaming revenues (in total) at rates between 45% and 75% of gross revenues. Meanwhile online operators would be taxed 48% (in total – 20% GGR and 28% corporate tax).
The European Commission eventually ruled the two tax rates were permissible, and Denmark’s liberalization plan moved forward.
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 is €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. Unlike Italy, Spain, and France, poker operators in Denmark are able to run their rooms with international liquidity, providing a better playing experience.
Danish authorities require ISPs to comply with blocking requests of unlicensed sites after a formal court injunction from a Danish judge.
In May 2011, the Danish Gambling Authority (DGA) revised its stance in regard to a key regulatory provision for 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." This allows for the DGA to determine that parts of the online gaming service provided by Denmark do not have to be located within Denmark. That places Denmark squarely within the norm of European jurisdictions – most of which don’t require online gaming servers to be in country in order to be licensed.
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.”
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, affecting five local and 20 foreign gaming operators. The Authority also issued nine smaller operators with income-restricted licenses which limit gross gambling revenue to 1 million DK – approximately £100,000.
The Danish Gaming Authority expected online gaming revenue to hit the 970 million DK mark in 2013. In 2012, the Danish market generated 870 million DK in online gaming revenue.
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Spillemyndigheden (National Gaming Authority of Denmark)
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