Lower Online Gambling Tax Fully Justified

The European Commission has rejected a State aid complaint lodged by a number of Danish land-based gambling operators challenging the lower tax rate to be imposed on online gambling operators via the Danish Gaming Duties Act 2010. The Remote Gambling Association, which has supported the Danish Government’s ability to vary its gambling tax rate where there are clear and justifiable reasons to do so, has provided detailed evidence to the Commission and has welcomed the judgement and its wider implications.

The European Commission has deemed that the Danish tax policy is compatible with the internal market on the basis of Article 107(3) © TFEU. Speaking on behalf of the RGA, which is the largest trade association for remote gambling operators in the world, CEO Clive Hawkswood expressed the association’s satisfaction with the Commission’s central finding that the Danish Government can vary its tax rate between different platforms where there are clear and justifiable reasons to do so.

‘There are obvious differences between the business models employed by off and online operators and the fiscal impositions on those businesses need to reflect that differentiation. 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. There are clear and justifiable reasons for a lower rate for remote operators,’ Mr Hawkswood explained.

‘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,’ said Hawkswood, who also stated that, in the light of the judgement, the association ‘could not rule out taking action against any EU jurisdiction which has, or intends, to impose an unjustified tax rate on remote operators. Those favouring offline monopoly operations’ fiscal position should take note of this judgement.’

With regard to the opening of the Danish online gambling market, which has been widely supported by the remote gambling industry, Mr Hawkswood explained that ‘the State aid process has unfortunately delayed the introduction of the new Danish remote gambling legislation’ but that he ‘hoped that the new regime would now be put in place as soon as is practically possible because it would lead to important benefits for the Danish authorities, licensed remote operators and consumers alike.’