Denmark Amends A Clause In Their Online Gambling Proposal

Denmark decided to proceed with its online gambling proposal which is currently being reviewed by the European Commission. Unfortunately, there is a delay in the review process which has given the Danish authorities time to review the proposal. Also, the Danish Gambling Authority (DGA) has modified a section in one of the most important clauses supporting online gambling operators.

DGA Supervision In Other Jurisdictions

The initial proposal required licensees to have their gaming servers located in Denmark. Many online gambling operators had a major issue with this requirement because they would have had to duplicate the equipment. Therefore, the DGA has decided to allow part of the operator’s servers to be located outside of Denmark’s jurisdiction. The thought process is that the DGA should be able to adequately supervise the servers in another country.

However, the list of acceptable countries to house the server has not yet been published. The DGA is conducting many discussions with other national regulators. One consideration for this amendment in the proposed clause was the realization that some casinos will have trouble operating in Denmark if the equipment was located within the country. Therefore, this could present a loss of appeal to their jurisdiction from the online gaming community.

Taxation Proposal

The European Commission has proposed an online gambling tax rate of 20 percent on all gross wins. However, the Royal Casino in Aarhus and the Danish slot machine association are fighting this proposal stating that the government is attempting to subsidize online gambling. Unfortunately, this is against the European Commission’s principles.

Target Implementation Dates

The DGA is hoping that the European Commission will publicly announce its decision before the summer break in August. That way upon return, the steps to install a regulated online gambling system can be initiated. The original regulation date was January 2011. However, due to the objection by land-based gambling operators, this date was unrealistic.

In December 2010, the Danish taxation minister announced that the government was attempting to have the law set by the summer of 2011 which is also now unrealistic. As a result, the DGA is unwilling to set a target date but is hoping to have all affairs in order by the beginning of 2012.

This is a major step for the gaming industry in Denmark. Once the approval is released, experts can begin building the jurisdictional system and online gambling can commence. At this point, a slew of new casinos will be available to online gamers.