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Danish Online Gaming

Like many European countries, Denmark's progress toward a competitive online gaming market was slowed by the presence of a state-owned gambling monopoly. For years, Danske Spil, in operation since 1948, controlled both land-based and online gaming in Denmark. The Danish government controls 80% of Danske Spil. When Denmark moved to open the online gaming marketplace in 2012, Danske Spil retained its monopoly over lottery, bingo, keno, and a range of card and arcade games.

Denmark began its move toward liberalization in 2008 when Danske Spil's monopoly was challenged by the European Court of Justice (ECJ). After the challenge, the Danish government began the long process of creating a licensing and regulatory system that would open the online gaming market to other companies.

In June 2010, the Danish Parliament adopted legislation to open up the online gaming market. The law was challenged by land-based gaming companies on the premise that online gaming companies were being taxed at a lower rate than land-based operators. Danish tax requirements under the new law would tax land-based gaming revenues (in total) at rates between 45% and 75% of gross revenues. Meanwhile, online operators would be taxed 48% (in total – 20% GGR and 28% corporate tax).

The European Commission eventually ruled the two tax rates permissible, and Denmark's liberalization plan moved forward.

Danish gambling laws provide a structured system for the licensing and regulation of online gambling operations. Other gambling groups wanting to establish online gambling sites in Denmark must meet certain requirements. Operators must have an office that is physically located in Denmark and must have a reporting system in place that complies with Danish tax rules. The application fee is EUR 36,000 per license, with a dual license application fee of EUR 51,000 and an annual licensing fee ranging from EUR 7,000 to EUR 200,000, based on gross win. Unlike Italy, Spain and France, poker operators in Denmark are able to run their rooms with international liquidity, providing a better playing experience.

Danish authorities require ISPs to comply with blocking requests for unlicensed sites after a formal court injunction from a Danish judge.

In May 2011, the Danish Gambling Authority (DGA) revised its stance on a key regulatory provision for online foreign operators. The revised clause states, "In special cases, the Danish Gambling Authority may allow part of the licensee's gambling system to be located in a country that is not covered by a bilateral supervision agreement in accordance with subsection 2 if supervision by the Danish Gambling Authority of this part of the gambling system can be conducted in a satisfactory manner." This allows for the DGA to determine that parts of the online gaming service provided by Denmark do not have to be located within Denmark. That places Denmark squarely within the norm of European jurisdictions, most of which don't require online gaming servers to be in-country to be licensed.

In July 2011, the Alderney Gambling Control Commission and the Danish Gambling Authority entered into a bilateral cooperation agreement. The cooperation agreement establishes a "formal basis for cooperation and information sharing between the authorities."

In January 2013, the Danish Gambling Authority evaluated the performance of the online gaming licenses issued for their initial one-year period. Based on the review, it has extended the online gaming licenses to five years, affecting five local and 20 foreign gaming operators. The Authority also issued to nine smaller operators income-restricted licenses that limit gross gambling revenue to 1 million DK – approximately GBP 100,000.

In May 2015, Denmark received approval from the European Commission to make several modifications to its online gambling legislation, including full regulation of daily fantasy sports. The proposed new regulations would impose an increased licensing fee on operators that generate revenue of more than EUR 13.4 million.
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