Denmark gaming jurisdiction sets an example
Denmark remains one of the strictest and safest gambling jurisdictions in the world. Despite tightening regulations, the Danish gambling industry keeps on growing. In Q1 of 2019, for example, the online sector of the country’s gambling industry revealed a 5% year-on-year increase, amounting to $910 million dollars.
Gambling has been around in Denmark since the beginning of the 19th century. It started as a monopoly, and, largely, has remained this way to this day. Gambling grew popular in Denmark particularly shortly after World War II. A state company called Dansk Tipstjeneste operated almost all the gambling establishments.
Later on, the company changed its name to Danske Spil, slightly changing its ownership; -the 80 percent of it was still owned by the government, whereas the remaining 20 percent was split between the Federation of Sports and the Association of Gymnastics and Sports. A significant share of gambling industry revenue was used by the government for the improvement of sports, culture and other social projects.
In 1990, the new Danish Gambling Act was adopted, allowing private operators to run casinos in the country. Nevertheless, the government still kept tight control over these casinos’ operations limiting their number to just a few.
Notwithstanding its relatively small size, Denmark has a surprisingly large amount of casinos, and other gaming venues scattered across the country. In total, there are over 26,000 slot machines and 3,300 slot arcades in Denmark. Slots are the most popular type of casino gambling here. There are 22 gambling facilities in Denmark situated in 12 cities such as Copenhagen, Aarhus, Aalborg, Odense and Helsingor.
In addition to land-based casinos, there are eight-horse racetracks, five cruise ships and one racetrack for dogs racing.
Casino Marienlyst is believed to be the oldest one in Denmark, and it is located in Helsingor. Originally, it was built as a health resort and a hotel that was frequently visited by noble royalties of Europe. Later, in 1902 King Frederick VIII of Denmark ordered to build a casino there.
Casino Copenhagen is the largest casino in Denmark, with some 140 slots and close to 25 live game tables. The casino in Copenhagen also offers a wide array of games such as Blackjack, Roulette, Poker, Rocket 7 Punto Banco, and others. All eight Danish casinos boast the Denmark Casino Jackpot, – a nationwide casino pool that draws up to two million dollars in prizes for lucky winners.
The legal gambling age in Danish Casinos is 18 years of age. Gamblers are admitted into a casino upon showing a passport or a valid ID. Although the local language is Danish, Danish casinos host a very international crowd of tourists from all over the world, and therefore, everyone understands and speaks English here.
Sports betting is also widely acclaimed type of gambling in Denmark. There are over twenty sports betting operators operating in Denmark that provide a great assortment of sports betting for Danish punters and tourists.
Online gambling is also legal in Denmark and has become the most popular type of gambling in the country. Licensed by Danish Gambling Authority, over a hundred online operators are offering a wide range of online casino games, sports betting and lottery games.
Online gaming regulation sets the pace for growth
With the rising popularity of the internet, on June 04, 2010, the Danish Gaming Act was modified to facilitate partial liberalization of the online gaming industry. The Act became effective on January 01, 2012, allowing private online operators to obtain Danish license for offering online casino and betting games in the country. In addition, the online gaming was charged lower tax rates at 20% of GGR, as opposed to 45% tax on land-based casinos’ GGR and 41% applied on GGR from slot machine venues.
Since the updated Gaming Act took effect in 2012, the Danish gaming market has been showing constant growth in GGR on betting and online casino. In six years, the GGR of the betting market has gone up from $170 mln in 2012 to $365 mln in 2018, which constitutes a 115% increase. In quite the same way, the GGR of online casino grew from $125.7mln in 2012 to $312 mln in 2018, designating a 148% growth over the same period.
Much of Denmark’s online gaming industry growth is attributed to the implementation of the necessary policies and procedures that provide high standards for regulation of online gambling business.
For example, some of the requirements for obtaining an online gaming operator license in Denmark are the following:
- Applicants must have adequate capital to qualify for getting a license for online gaming operations;
- Players’ funds must be kept in separate “setoff-free” bank account;
- All online gaming solutions must be tested and certified by organizations approved by the Danish Gambling Authority;
- All online operators must adhere to and implement the European Parliament’s Anti-Money Laundering Policy for online gaming service providers;
Finding middle ground
The Danish Gambling Authority has been recognized as quite lenient towards operators, and open towards working out common ground and feasible solutions with them. Applying sanctions against operators is used only in rare cases.
In an effort to increase player protection and decrease the level of gambling advertisement in the media, in June 2018 the majority of the Danish Parliament approved the political agreement on provisions to introduce amendments to the Danish gambling regulations.
After that political agreement was made, the Danish Gambling Authority and the Danish Online Gambling Association took the initiative to self-regulate and voluntarily signed on the Code of Conduct.
The Code of Conduct’s main points is to increase players’ awareness of the dangers of irresponsible gambling and minimize the risks related to excessive media advertisement of gambling products.
Some members of the Danish Parliament have adopted a rather combative approach towards gambling regulation policies, and have created a long-standing debate over it suggesting that Denmark should impose a complete ban on all forms of gambling advertisement.
The Danish Online Gambling Association is putting a strong effort to convince such politicians to give some time before the implementation of the Code of Conduct shows positive results, and not go through with radical regulatory changes.
Pressed for stricter online gambling regulations by the government, the gambling regulator introduced a new requirement setting a mandatory deposit limit on the amount a player can spend and wager online, which became effective on January 01, 2020.
Another government measure looming on the horizon is an increase of tax on GGR of online gaming operations from 20% to 28%, which is expected to be in force in 2021. According to the Danish government, the revenue from these tax proceeds will go towards financing various initiatives such as healthcare, education and the welfare system.