The European Casino Association deplores the European Commission Decision in the Danish State Aid Case

The European Commission today concluded that the different taxation regimes for online and land-based gambling operations in Denmark is compatible with European competition rules.

According to the Commission, the law liberalising gambling in Denmark and applying lower taxes for online casinos (20 on the GGR (GGR: gross gaming revenue : stakes minus winnings)) than for land-based casinos (75 on the GGR) is acceptable because ”the positive effects of the liberalisation of the sector outweigh potential distortions of competition”.

The European Casino Association deplores the argumentation behind the decision of the Commission, as it places the importance of liberalizing a market in the forefront rather than considering the reality of the competitiveness of the market, which is linked to the issue of protecting consumers and combatting fraud.

“Legal licenses held by highly regulated land-based casinos should not be undermined by internet operators who have been operating illegally over the years, without paying taxes, nor abiding by consumer protection and anti-fraud measures” said Ron Goudsmit, Chairman of the ECA. “Exonerating these operators from the level of taxation imposed on land-based casinos will have a severe negative impact on casino operators with no gain to the regulating rationale” he added.

Furthermore, this decision, and more specifically the rationale behind it, is completely to the detriment of the crucial importance of consumer protection and combatting fraud, two elements which lie at the heart of European gambling policy developments. Online gambling presents additional, different risks due to the lack of direct contact between consumer and operator and the high levels of addiction linked to the omnipresence of the games on the internet.

When the Commission’s decision is published, the ECA will analyse in depth the argumentation of the Commission and comment accordingly.