European Commission Approves Danish Online Gambling Law

New law to come into force on January 1 2012, following European Commission's dismissal of protests.

The European Commission has ruled in favour of Denmark's online gambling proposal by dismissing complaints that the 20% tax on gross gaming revenues proposed under the law is equivalent to State Aid. Land casinos pay this tax at a rate of between 45% and 71%.

The EC rejected the claim, stating, “The positive effects of the liberalisation of the sector outweigh potential distortions of competition.”

Chief Executive of the Remote Gambling Association, Clive Hawkswood, said on the debate, "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."

With this ruling, the way is now clear for the new law. Two types of licenses will be available. The first is for operators offering online and offline sports betting, including fixed, pool, spread and exchanges. The second is for online casinos offering blackjack, bridge, backgammon, poker, roulette, slots, and whist. Bingo and horse racing betting will be retained within the state-owned Danske Spil.

The news has been greeted with satisfaction by online gambling operators. Betfair, which has long agitated for legalization and regulation across Europe, has stated its intent to apply for a license.

Also adding to the chorus of approval is The Betson Group, which recently acquired Betsafe. Its sponsorship agreement with the Danish premier league, to be renamed the Betsafe league, will now be implemented.

Betfair's chief legal and regulatory affairs officer, Martin Cruddace, lauded the law as a prototype for a pan-European system, while Clive Hawkswood said that jurisdictions seeking to impose higher tax rates on online operations should learn from this judgement.