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Denmark joins online gaming market with well-received tax structure

After thoroughly checking Denmark’s plans, the European Commission has given the OK for the nation to establish online gambling. In fact, many industry insiders say that this structure is ideal and other countries in the EU should model their tax structures on the one used by the Danes.

Denmark is offering lower taxes for online gambling than it has done for land-based casinos. Although there were a number of complaints from current gaming operators, the commission has allowed it. The complaints demanded that the lower taxes for online casinos were in essence state aid. The commission did not disagree, but stated that the lower rate is harmonious with European Union guidelines “because the positive effects of the liberalisation of the market outweigh the distortions of competition brought about by the measure.”

After getting the go-ahead from the European Commission, Denmark to regulate online gaming in way to benefit all constituencies

Denmark’s Gaming Duties Act suggests that gaming operators that put forth online casino and gaming machines be taxed to a flat rate on all gaming revenues of 20 per cent. Currently land-based casinos have a higher levy, of 75 per cent.

Clive Hawkswood of the Remote Gambling Association said there are reasons to allow for different rate structures: “In essence, 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.

“Obviously, this has implications for other jurisdictions and their fiscal policies, both those that have opened their markets and those that are planning to do so in the near future.”

One company that is planning to take advantage of this opportunity is Betfair which is based in the UK. Said Betfair’s Martin Cruddace: “Denmark’s new regulation is a great example of what modern-day gambling legislation should look like across Europe.”

“It is structured in a manner that will provide the Danish government, consumers and international operators with the benefits that only a transparent, safe and competitive online gambling market can bring.”

OCA News Editor

Jenny McKinnley is OCA’s financial correspondent. After spending years on the trading floor in both NY and London, she offers insight from the inside out on world financial news and events.