Why Denmark Online Gambling Regulation is a Positive Move

Supporters of open and regulated online gambling throughout Europe are a step closer to realising that dream, following the news that the European Commission (EC) has signed off on plans by Denmark to do away with its online gambling monopoly, and instead license and regulate its online gambling industry.

And in doing so, Denmark is following in the footsteps of such 'online gambling-friendly' roll models as the UK, France and Italy.

Thanks to the EC's recent approval of the Danish online gambling law known as the Gaming Duties Act, Denmark is now poised to open up its online gambling market to both domestic and foreign online gambling firms and operators, through the issuing of Danish online gambling licenses, subject to application and approval, of course.

Denmark Online Gambling Liberalisation Positive For All

Danish online gambling regulation or 'liberalisation' is an extremely positive move not only for the country's gambling fans - who will finally be able to enjoy playing at online gambling sites deemed safe, reputable and accountable by the Danish government - but for many of Europe's online gambling operators, who (subject to being granted a Danish online gambling license) will be able to legally offer their services in Denmark, an online gambling hot spot.

Plus the Danish government will benefit a great deal from the millions and millions of Danish krone in online gambling fees and taxes that will be generated each year.

But not everyone is so thrilled about Denmark's online gambling regulations or Gaming Duties Act.

Over and above the usual online gambling "haters", the online gambling-friendly legislation has been slated by none other than the country's land-based gambling industry. The reason, it seems, is the wide disparity between the taxes online gambling firms are required to pay compared to those payable by 'brick-and-mortar' gambling operations.

As laid out in the Gaming Duties Act, online gambling sites licensed to operate in Denmark are required to pay only 20 per cent of their gross revenues (after winnings) in taxes, compared with the 75 per cent that land-based Danish gambling venues are required to pay.

Danish land casino operators are describing this discrepancy in the tax rates as nothing more than 'state aid', which unfairly favours online gambling operators over established land gambling operators.

And they may have a point as even the European Commission acknowledged this discrepancy, as reflected in a quote from a spokesperson: "The positive effects of the liberalization of the [Danish online gambling] market outweigh the distortions of competition brought about by the measure."

Danish Online Gambling Firms Deserve Tax Break

However, despite the tax issue, the Gaming Duties Act was still approved in its entirety by the EC, no doubt because it recognised that land-based casinos are bound to a single geographic area, whereas online casinos are forced to compete with hundreds of online rivals. And as a result, perhaps it is only right that Danish online gambling firms deserve a tax break.

Of the same opinion (of course) is the Remote Gambling Association, the online gambling body which represents the interests of the world's largest online gambling operators.

However, the European Lotteries - an independent European lottery and toto association - is against Denmark's online gambling regulation because it claims it will result in an increase in problem gambling, the standard - and dare we say tired and cliched - objection raised every time online gambling regulation is mentioned.

The bottom line is that online gambling will always be better off legalised and regulated, than not. Look no further than the UK to see how a successfully regulated online gaming industry works in practice, and the United States to see how an "online gambling prohibition" has forced the popular internet activity underground, and regular law-abiding citizens to break the law.

So well done Denmark.

 Posted by Anton Johan at 15:19 on 5 October 2011