In a landmark decision, the European Commission (EC) sided with online casinos in Denmark, rejecting the argument that it’s unfair for Danish online casinos to pay a lower rate of tax than traditional gambling operators.
The Danish Gaming Duties Act of 2010 was the result of efforts to abolishing the inefficient ‘Danske Spil’ state gambling monopoly and liberalizing the market by licensing private operators of online casino games, internet sports betting, poker, and online bingo games in Denmark
The 2010 Danish gambling law prescribed a 20% tax on gross gaming revenues for online casinos in Denmark. Traditional, land-based Danish casinos and slot machine operators pay a 45% tax on gross gaming revenue up to DDK 48 million.
This discrepancy caused the traditional casinos to challenge the validity of the law by taking the Danish government to the European Commission.
The Remote Gambling Association (RGA), which represents the world’s largest licensed and stock market-listed remote gambling operators and software providers, played a key supporting role by providing detailed evidence to help the commission reach its decision.
CEO Clive Hawkswood of the RGA commented on the ruling – “Land-based operations compete within physical national boundaries, whereas online companies are part of a highly competitive international environment, and fiscal policy should be set accordingly. There are clear and justifiable reasons for a lower rate for remote operators.”
The EC decision is likely to have far reaching consequence in other EU member states with governments unfavorable to a liberalized online gambling market.
“(The RGA) could not rule out taking action against any EU jurisdiction which has, or intends to impose an unjustified tax rate on remote operators. Those favoring the fiscal position of offline monopoly operations should take note of this judgment,” advises Mr. Hawkwood.