Gaming Law 2019

Last Updated November 25, 2019

Denmark

Law and Practice

Author



Mazanti-Andersen Korsø Jensen was founded in 1853 and is Denmark's oldest law firm, with strong international relations. Today, the company represents a large number of Danish and international corporate clients. The firm is characterised by professional competence and integrity, and provides specialised legal advice within corporate and commercial, real estate, insolvency and estate management, transactions and dispute resolution. The media & entertainment team advises on all aspects of media and entertainment law, ranging from classic publishing agreements, agreements with collecting societies, record contracts, format agreements, merchandise agreements, sports events and concerts, and transactional work, to matters related to internet-based distribution forms and the complex legal challenges related to the new distribution forms of music, film, radio and television on all platforms, including apps and social media. Mazanti furthermore has the largest and most experienced gaming and gambling law group in Denmark, with many first mover matters that merge issues regarding sport, online entertainment, marketing and gaming, as well as matters in the borderland between social gaming and gambling.

Based on a political agreement from summer 2018, the Danish Gambling Act was slightly amended on 1 February 2019. The amendment primarily increased the licensee's fees in order to finance the Danish Gambling Authority's (DGA's) expenses related to gambling addiction. The other parts of the political agreement have been ratified into amended executive orders that will come into force on 1 January 2020. These executive orders set up stricter requirements in relation to bonuses, marketing, etc and strengthen the use of the DGA's Register of Voluntarily Excluded Players (ROFUS). The political agreement also resulted in a code of conduct for the gambling industry that took effect as of 1 July 2019. Please see 3.7 Pending Legislation for an overview of the recently adapted legislation entering into force per 1 January 2020.

See 1.1 Current Outlook.

Betting

Betting such as sports race and horse betting is permitted in Denmark subject to specific licence requirements. The same applies to fantasy betting (payment to back a "league" or "portfolio" selection over a period of time; for example, in relation to sport or shares).

Bingo, Casino and Poker

Online bingo, casino and poker is permitted in Denmark upon specific licence requirements.

Lottery

The Danish gambling market is only partly liberalised, and thus the provision of lotteries is kept under a monopoly. The provision thereof is thus reserved for the Danish state-owned entity Danske Spil. Therefore, it is not possible for anyone else to obtain a licence to provide lotteries. However, it is possible to obtain a licence for non-profit lotteries.

Social/Skill Arrangements

Social games that are provided for free (that is, where no stake or payment is needed to participate) can be provided without a licence.

"Skill games" with no element of chance are permitted under Danish law and can be provided without a licence.

All of the games mentioned in 2.1 Online are also permitted as land-based games conditional upon a licence. Please be aware that special conditions apply for bingo and charity lotteries. As regard to physical gaming machines, these are also permitted in Denmark, although they need to fulfil certain technical requirements as well as be licensed.

The primary legislation for gambling activities in Denmark is the Danish Act on Gambling (Gambling Act). Supplementing the Gambling Act is a series of specific Executive Orders:

  • Executive Order No 1301 of 15 December 2011 on non-profit lotteries (as amended with Executive Order No 48 of 23 January 2012, Executive Order No 1132 of 4 December 2012 and Executive Order No 1096 of 11 September 2013);
  • Executive Order No 1302 of 15 December 2011 on gaming machines in arcades and restaurants (as amended with Executive Order No 1562 of 11 December 2015 and Executive Order No 690 of 8 June 2016);
  • Executive Order No 1304 of 15 December 2011 on reimbursement rates for certain games;
  • Executive Order No 65 of 25 January 2012 on land-based betting (as amended with Executive Order No 691 of 8 June 2016);
  • Executive Order No 66 of 25 January 2012 on the provision of online betting (as amended with Executive Order No 1358 of 12 December 2014 and Executive Order No 693 of 8 June 2016);
  • Executive Order No 727 of 9 June 2017 on partial exemption from the Anti-Money Laundering Act for certain games (as amended with Executive Order No 1285 of 27 November 2017);
  • Executive Order No 772 of 9 June 2017 on land-based casinos;
  • Executive Order No 773 of 9 June 2017 on online casinos (as amended with Executive Order No 773 of 9 June 2017);
  • Executive Order No 1403 of 1 December 2017 on reporting etc to the State Prosecutor for Serious Economic and International Crime;
  • Executive Order No 1704 of 20 December 2017 on notification and publication of information about domestic politically exposed persons (PEPs); and
  • Executive Order No 72 of 29 January 2018 on the special contribution to the sport of horse racing.

Licensed games in Denmark shall also have their games certified in accordance with the Danish Gambling Authority's certification programme.

The provision of gambling in Denmark is subject to the Anti-Money Laundering Act (AML Act) and general rules on marketing in the Danish Marketing Practices Act, which supplements the marketing provisions in the Gambling Act. Furthermore, financial regulation is relevant in relation to the supply of payment services, e-money, etc, as well as regulation on consumer protection in relation to information requirements towards players, which can be applicable. Additionally, there are rules on the players' right to withdraw from a transaction. Finally, licensed games are subject to the Danish Gambling Duties Act.

All of the relevant products are permitted according to Danish Law, conditional upon specific requirements. However, please note that commercial lotteries are a monopoly.

The Danish Gambling Act applies on all games offered to the Danish market. A "game" is defined as any activity that falls within one of the following categories:

  • lotteries, where the chance of winning is solely based on chance;
  • combination games, where the chance of winning is based on a combination of chance and skills; and
  • betting; ie, where the chance of winning is dependent on the outcome of an event.

The Danish Gambling Act applies both on games that are and are not subject to the payment of a stake to participate, although the Gambling Act only requires a licence for games subject to payment of a stake to participate.

Activities where the betting is not concerned with the result of an event or games where there is no element of chance, such as participation in sports events or competitions based on knowledge (with no drawing of lots) do not fall within the Danish Gambling Act.

The Gambling Act defines land-based gambling as gambling that is entered into by a player and a gaming supplier, or the supplier’s agent, meeting physically. Land-based games are, for example, games that are provided in shops or in physical casinos.

The Gambling Act defines "online gambling" as gambling that is entered into by a player and a gambling operator using remote communication. Remote communication means communication without the player and the gambling operator meeting physically; for example, through the internet, telephone, radio, mobile phone, or email.

All violations of the Gambling Act may result in penalties as stated in 3.6 Penalties for Unlawful Gambling.

Key offences that can be committed are:

  • violations of the marketing provisions in the Gambling law;
  • providing games without a licence;
  • violation of the terms and conditions of the licence; and
  • violation of the Money Laundering Act and the regulations concerning Know Your Customer requirements.

The sanctions for breaching the Danish gambling legislation/regulations range from a warning to up to two years in prison, dependent on the specific offence. The most common sanctions are a warning and an order to correct the offence. The DGA does not have the power to issue fines and thus it is obliged to hand over the matter to the Danish police with the recommendation that the police issue a penalty notice that the violator can choose to accept or try the matter in court. The DGA has just recently started to hand over matters to the police, thus there is very limited case law.

The DGA can also choose to revoke the gambling operator’s licence if there is a serious breach of the Danish Gambling Act.

In relation to gambling operators who direct their provision of gambling to the Danish market without a valid licence, the DGA will request the Bailiff’s Court to issue an ISP block of the website.

As mentioned in 3.1 Key Legislation, the political agreement has resulted in the following pieces of legislation, which will enter into force per 1 January 2020:

  • Executive Order No 1288 of 29 November 2019 on non-profit lotteries;
  • Executive Order No 1289 of 29 November 2019 on gaming machines in arcades and restaurants;
  • Executive Order No 1262 of 29 November 2019 on duty payment to the Gaming Authority;
  • Executive Order No 1275 of 29 November 2019 on land-based betting;
  • Executive Order No 1276 of 29 November 2019 on online betting;
  • Executive Order No 1290 of 29 November 2019 on land-based casinos;
  • Executive Order No 1274 of 29 November 2019 on online casinos.

These executive orders have introduced changes to the gambling sectors in three main areas: (i) marketing, (ii) responsible gaming and (iii) promotional measures. These changes will be outlined in the following.

Marketing

The new legislation extends the extent of information that the gambling operators must state in marketing material. In the future, information such as the age limit of the game, the DGA's hotline concerning responsible gaming and the possibility of listing in ROFUS shall be stated when marketing games. The gambling operator must also use the DGA's labelling scheme in the marketing material.

Responsible Gambling

As regard to responsible gambling, the new legislation requires the players to fix a daily, weekly, or monthly deposit limit for their game before beginning the game. Also, there will be imposed an attention duty upon the online gambling operator in relation to abnormal gaming patterns that indicate gambling problems with the players. Lastly, all players listed in ROFUS decline to receive marketing material from a gambling operator in the exclusion period. Consequently, the gambling operator must consult ROFUS to check whether the player is listed therein before sending marketing material to the player.

Promotional Measures

The new legislation sets up limits for deposits on gaming accounts or stakes in games to obtain promotional measures. The legislation also limits the amount of promotional measures and sets up a limit on the number of rewagering requirements. Also, winnings from promotional measures may not be subject to rewagering requirements. Lastly, promotional measures must be granted on the same terms when given to individual players and they must be given to all players playing within the same fixed interval or who meet another set criterion.

        . The interval must be fixed so that the promotional measure is offered to a minimum of 100 players.

The Danish gambling market is supervised by the Danish Gambling Authority, the Danish Ministry of Taxation and the Danish Consumer Ombudsman. As regard to licensing, it is the DGA that issues the licence to provide gambling.

The Danish gambling market is intensively regulated and watched over by the DGA, which knows all stakeholders. At the same time, the DGA is open for dialogue.

Provision of a game requires a licence from the DGA if the game (i) is offered to the Danish market, (ii) is subject to the payment of a stake to participate, and (iii) falls within one of the following categories: (a) lotteries, (b) combination games, or (c) betting.

As social/skill arrangements do not normally meet the above criteria, such games generally do not require a licence.

Examples of such games that can be provided without a licence:

  • games with a stake, but without the opportunity of winnings;
  • games without a stake, but with the opportunity of winnings; and
  • games with a stake and winnings, where there is no element of chance, such as chess, quizzes, bridge with duplicate cards, sports events, certain types of computer games, etc.

Danish gambling licences can be divided into two main categories: (i) online gambling licences and (ii) land-based gambling licences.

There are two types of online gambling licence available in Denmark: a betting licence and an online casino licence. The betting licence also covers the provision of land-based betting.

As for land-based gambling, there are two main types of land-based licence available in Denmark: a casino licence and a limited licence covering only gaming machines.

The Gambling Act has been amended, with effect as of 1 January 2018, where betting on horse, dog and pigeon racing, in addition to online bingo, has been liberalised and is now part of the online casino licence and betting licence.

Further, it is possible to apply for a revenue-restricted licence according to which the gross gambling revenue (stakes minus winnings) (GGR) cannot exceed DKK1,000,000.

It is also possible to apply for a turnover-restricted manager game according to which the turnover cannot exceed DKK5,000,000 and the repayment percentage (percentage return) cannot exceed 20%.

There are no limits on the number of licences to provide online gambling, or on having gaming machines in arcades or restaurants.

There is a restriction on the number of land-based casino licences that may be issued.

It is not possible to get key personnel or subcontractor licences, and subcontractors are generally not obliged to obtain their own licence – on the condition that they only act as suppliers to the gambling operator. However, this is based on a specific assessment of the obligations between the parties.

All licences for online gambling are readily available as long as the requirements in 4.6 Application Requirements are met and the fees are paid. However, licences for land-based casinos are only available when one of the current licences becomes available or if the DGA opens for new applications.

The different licences are issued for different periods of time: the “revenue-restricted” licence to provide online gambling is limited to one year, whereas a normal licence to provide online gambling (betting and/or online casino) can be issued for up to five years. It is possible to apply for renewal before expiration of the licence. This process is similar to but less comprehensive than the regular application process described under 4.6 Application Requirements.

The land-based casino licence is issued for a period of up to ten years, while the limited land-based gaming machine licence is issued on an individual basis and may be granted for an unlimited period of time.

As mentioned previously, Danish gambling licences can be divided into two main categories: (i) online gambling licences and (ii) land-based gambling licences.

Online Gambling

An application for a gambling licence is subject to a fee (see 4.8 Application Fees).

Any person wishing to provide online gambling to the Danish market must (i) be at least 21 years old, (ii) not have a legal guardian, (iii) not be subject to insolvency proceedings, (iv) not have been convicted of criminal offences that render it probable that the person will abuse their access to gambling, and (v) not have any debt to public authorities.

If the person does not live in Denmark or in another EU/EEA country, the person must have appointed a representative living in Denmark or – if the appointed representative is a legal entity – established in Denmark.

Any company that wishes to provide online gambling to the Danish market must be established within the EU/EEA or have an appointed representative in Denmark.

Furthermore, the members of the board and the directors must meet the requirements for physical persons mentioned above.

When appointing a representative, the representative must be approved by the DGA and, in order to obtain this approval, the representative must meet requirements similar to the ones being imposed on physical persons mentioned above.

If these minimum requirements are met, the applicant must further prove that it will be able to provide online gambling in a sound financial and professional manner.

The assessment is made by the DGA based on a large number of financial and technical documents, which the applicant is required to submit. The requirements for a revenue-restricted licence are less comprehensive.

The DGA may either choose to grant a full licence, grant a conditional licence or reject the application. Applicants failing to submit sufficient documentation or failing to live up to the requirements set forth by the DGA will normally be given a chance to take remedial action by providing the missing information before the application is rejected.

The DGA will consider the overall picture, and if it finds that the necessary requirements are met, it will issue a licence. From the handing in of an application to the DGA, the issuing of a licence will normally take between three and six months.

As a main rule, there is no refund of the application fee, which will be forfeited if the application is rejected. If the applicant applies again, a new fee must be paid.

Land-Based Gambling

The process when applying for a land-based casino licence and a licence to set up gaming machines is similar to the one described above and supplemented by the executive orders on land-based casinos and gaming machines in arcades and restaurants. Accordingly, there are, eg, requirements for persons working within a land-based casino.

At the time of writing (August 2019), there are eight land-based casino licences. For now, it is not possible to apply for new land-based casino licences. It is only possible to apply for a licence when one of the current licences becomes available or if the DGA opens for new applications.

As stated in 4.6 Application Requirements, it normally takes between three and six months from the handing in of an application to the DGA issuing a licence.

The application fee is DKK279,500 for a betting licence or an online casino licence (2019 level); however, if the party applies for a combined betting and online casino licence, the fee is DKK391,300 (2019 level).

For applicants with an annual GGR of less than DKK1,000,000, a “revenue-restricted” licence may be issued, and the fee is DKK 55,900 per licence (2019 level).

Online gambling operators have to pay an annual fee for holding the licence. The fee is based on their GGR. Additionally, the licence-holders have to pay gambling duty based on their GGR (see 13.1 Tax Rate by Sector).

Applying for a licence to set up gaming machines is subject to an annual fee of DKK641 (2019 level) per gaming machine.

It is possible to apply for a licence to set up gambling machines in premises (restaurationer) or gambling arcades that have an alcohol licence.

In principle it is only possible to give permission to set up a maximum of three gambling machines.

In gambling arcades, no other games or business activity other than gambling machines may occur. It is only permitted to sell candy, snacks and drinks on a limited scale, and it is prohibited to sell hard liquor (liquor with alcohol of 2.8% volume or more). Please note that certain specific requirements apply on gambling arcades.

See 3.7 Pending Legislation.

Online gambling operators contracting with players directly, either through their own website or through a white label site, must hold an online gambling licence to provide gambling in Denmark. In general, a "white label" site is defined as a site that markets games that is provided under a different party's licence to provide gambling, making it appear as if the white label site operates the game. This will allow the producer/product owner to sell its gambling product several times in a way that makes it look like a unique brand every time. The producer/product owner must be a licence-holder. There are specific regulations on the use of white label sites.

Online operators who do not contract directly with players, but only provide services to gambling operators, are not required to hold a licence.

Gambling operators are permitted to use affiliates, which in the Danish gambling market is often seen in relation to advertisement of the gambling operator's website or games.

Affiliates do not need permission from the DGA if they only advertise the gambling operator. If the affiliate, for example, has a relation to the players, owns gambling data, or owns rights associated with brands or websites that are advertised, the affiliate may need permission from the DGA.

The Danish regulation on consumer protection and marketing and the provision regarding marketing and advertisement in the Gambling Act do also apply for affiliates. Therefore, affiliates may be held liable for violations of these regulations.

As noted, it is possible for gambling operators that hold a Danish gambling licence to get permission to offer white label agreements.

Please note that regardless of the use of white labels, the gambling operator is always responsible for complying with the gambling law and the terms stipulated in the licence.

See 1.2 Recent Changes and 3.7 Pending Legislation regarding the enforcement of the political agreement.

The DGA has the legal grounds in the Gambling Act to ask the Bailiff’s Court to ISP block an unlicensed website (see 11.2 Sanctions for an elaboration of this).

The DGA also has the legal grounds to ask the Bailiff’s Court to order payment service providers to block payments to unlicensed operators.

The purpose of the Gambling Act is (i) to maintain the consumption of gambling services at a moderate level; (ii) to protect young people and other vulnerable people from being exploited through gambling or developing a gambling addiction; (iii) to protect players by ensuring that gambling is provided in a fair, responsible and transparent manner; and (iv) to ensure public order and to prevent gambling as a means to support crime.

This results in several obligations being imposed on Danish licence-holders, and especially on holders of a Danish licence to provide online gambling.

Such obligations include the obligation for online gambling operators to monitor the players’ consumption of gambling, providing the players with the possibility of “cooling-off periods” and providing access to a state-controlled Register of Voluntarily Excluded Players, as well as having their gambling system set up so that every time a player attempts to log in, the system automatically checks whether the player has registered himself with ROFUS, and if so, the system denies him access to his account.

Gambling management tools include the following.

  • Making information readily available to customers on how to gamble responsibly, how to access information about responsible gambling, how to recognise problems with gambling and how to seek help in this regard.
  • A mandatory self-imposed deposit limit that can only be increased after a 24-hour waiting period.
  • Problematic gambling behaviour and gambling addiction prevention procedures (the licence-holder must have drafted written internal rules and procedures for responsible gambling in order to prevent the development of gambling addiction among the players).
  • A register for temporarily or permanently self-excluded players.
    1. The players may temporarily exclude themselves from gaming for not less than 30 days; however, the player shall have the opportunity to choose a 24-hour break from gaming (cooling-off period).
    2. The players may exclude themselves permanently from gaming (meaning that they cannot re-register until one year after the commencement of the exclusion). In the case of permanent exclusion, the licence-holder shall inform the player about the option for counselling and treatment of pathological gambling at a Danish treatment centre.
    3. Both when registering new players and when the players log into the gaming system, the licence-holder must consult the registry to ensure that the player in question is not registered. If a player is in the register, the licence-holder must reject the registration of the player, or terminate the customer relationship.
    4. The licence-holder must inform the players about the possibility of registration of entries in the Register of Voluntarily Excluded Players on the Gambling Authority's website.

The provision of gambling in Denmark is subject to the Anti-Money Laundering Act. The AML Act has implemented the EU's AML Directives, most recently the 5th Directive.

The Danish Financial Supervisory Authority has published a guidance on the Danish AML Act that was updated in 2018.

Danish licence-holders may only receive payments into a gambling account from a payment services provider that provides these services legally in Denmark pursuant to the Danish Payments Act.

According to this Act, payment services may only be provided in Denmark by certain types of providers that have been granted authorisation in Denmark, in the European Union or in a country with which the European Union has entered into an agreement for the financial area.

If the service provider does not hold a Danish authorisation, it cannot begin its operation in Denmark before it has obtained a cross-border authorisation, cf the Danish Financial Business Act.

The authorisation is granted when the Danish Financial Services Authority has received notification from the supervisory authorities in the service provider’s home country.

Furthermore, gambling operators are not allowed to provide credit facilities to the players.

The 4th AML Directive was implemented as of 26 June 2017 via the new Danish AML Act. This had the effect that the AML regulation now covers both online and offline casinos and betting; thus, as of 26 June 2017, all gambling operators are required to identify and assess the risk of money laundering and financing of terrorism within their business on the basis of their business model. In regard to that risk assessment, they are required to have sufficient written policies, procedures and controls that can effectively limit the risk of money laundering and financing of terrorism. Additionally, the gambling operators are required to commence a customer due diligence with their customers. In certain situations, customer due diligence may require enhancement, while in other situations a simplified due diligence is sufficient. The new AML Act is very comprehensive and the above is not exhaustive. The DGA has published a guideline that should be seen as a supplement to the general guideline from the FSA.

Gambling operators are also obliged to inform the Danish State Prosecutor for Serious Economic and International Crime of any suspicious transactions.

Please note that the 5th AML Directive was implemented as of 2 May 2019 via the Danish AML Act. The main part of the law takes effect as of 10 January 2020, when suppliers of exchanging of virtual currencies and fiat currencies and suppliers of virtual wallets will be covered by the Danish AML Law.

There is no specific regulation concerning gambling with virtual currencies and, thus, the Gambling Act will apply if such activity can be characterised as “gambling” pursuant to Section 5(1)(i) of the Gambling Act, the most central condition being whether there is a chance of winning a prize.

Only regulated currencies are covered by the Danish Payment Act. This means that unregulated currencies such as bitcoin will not be accepted as a means of payment (payment instrument) by the gaming operators on the Danish market.

The DGA monitors the gambling market and the DGA will also monitor the licence-holders' compliance with marketing provisions. Please note that if infringement of such marketing provisions will result in fines or imprisonment, the case will be handed over to the Danish police (see 11 Enforcement).

Please note that games that are also regulated by the Danish regulation on marketing and consumer protection are also the responsibility of the Danish Consumer Ombudsman.

Neither the Gambling Act nor the Danish Marketing Practices Act defines advertising. It may be defined as a businessperson's or company's commercial communication to a consumer that is directly related to promotion, sale, or supply of a product.

The provision of gambling in Denmark is subject to general rules on marketing in the Danish Marketing Practices Act, which supplements the marketing provisions in the Gambling Act.

The marketing and advertisement of bonuses (for example, a sign-up bonus) is regulated by the executive orders on the provision of both land-based and online betting, and on the provision of online casinos.

According to the Danish Gambling Act, all marketing of gambling must (i) present the odds of winning in a correct and balanced way so that it does not give the impression that the chance of winning is greater than it actually is; (ii) present gambling as entertainment; (iii) not be targeted at children or persons under 18 in relation to the design of the communication or the choice of media used; (iv) not use well-known persons to suggest, contrary to the truth, that participation in gambling has contributed to the person’s success; and (v) not have any content that gives the impression that participation in gambling offers a solution to financial problems or gives the player social acceptance.

When marketing a bonus offer, all conditions must be disclosed in a clear and unambiguous manner within the immediate context of the bonus offer. However, depending on the media type, a referral to another medium for additional information concerning the offer can generally be accepted in the form of “one click away”. Bonuses may not be offered to single players on conditions that differ from the conditions offered to other players. The player shall have at least 60 days to meet any conditions associated with the payment of a bonus.

It is a requirement under the Danish regulation that the website (and all communication with the players) is available in Danish and the gambling duty is calculated and payable in Danish kroner. However, the website can also be available in other languages and use other currencies.

Violations of advertising regulations in the Gambling Act may be sanctioned with fines.

A Danish gambling licence cannot be transferred.

In the event of corporate restructuring – such as a merger, demerger or an exchange of shares – the DGA must be notified in advance in order to obtain prior approval. It is not possible to transfer (delegate) a licence or the rights and obligations that follow with the licence.

It should be noted that the DGA has expressed indeterminacy on this topic, which is why the matter of acquisitions and changes of control of a gambling licence is not certain at this time.

A change of corporate control occurs when a person or legal entity crosses the threshold of owning 10% of the shares or the voting rights in the company holding the licence. 

Similar requirements apply as in 10.2 Change of Corporate Control Triggers, as there are no exemptions for passive investors.

The DGA monitors the gambling market and can at any time open a procedure for revocation of a licence if it finds that the licence-holder can no longer supply games in a sound financial and professional manner. The DGA also has the legal grounds in the Gambling Act to ask the Bailiff’s Court to ISP block an unlicensed website.

The DGA has at this point no jurisdiction to issue fines for violation of the Danish Gambling Act. Consequently, even minor violations of the Act carry the risk of being brought in by the police in response to a report from the DGA.

The sanctions for breaching the Danish gambling legislation/regulations range from a warning to up to two years in prison, depending on the specific offence. Such cases will be monitored by the Danish police (see 11.3 Financial Penalties). There are still no public decisions on fines or imprisonment due to infringement of the Gambling Act, and the most common sanctions are a warning and an order to correct the offence.

In relation to gambling operators who direct their provision of gambling to the Danish market without a valid licence, the DGA will request the Bailiff’s Court to issue an ISP block of the website. The DGA has used this sanction on several occasions. Every time ISP blocking is granted, the relevant websites are listed on the DGA’s website.

The DGA monitors the gambling market and can at any time open a procedure for revocation of a licence if it finds that the licence-holder can no longer supply games in a sound financial and professional manner. Such a procedure has, to the best of this firm's knowledge, not yet been opened.

Decisions made by the DGA may be appealed to the National Tax Tribunal for a fee of DKK400. The decision made by the National Tax Tribunal must be brought before the Danish courts within three months of the decision. Otherwise, the decision from the National Tax Tribunal will be final.

As the DGA does not have the power to issue fines, it will be obliged to hand over the matter to the Danish police with the recommendation that the police issue a penalty notice that the violator can choose to accept and try in court. There are still no public decisions on fines or imprisonment due to infringement of the Gambling Act. The most common sanctions are a warning and an order to correct the offence.

Social gaming is often described as games consisting of structured activities that have contextual rules through which users can engage with one another. Social games are most often multiplayer and have one or more of the following features:

  • they are turn-based;
  • they are based on social platforms for providing users with an identity; and
  • they are played casually.

Social games that are provided for free (that is, where no stake or payment is needed to participate) can be provided without a licence.

The DGA has indicated that it is intensifying its monitoring of social gaming in order to ensure that it fulfils the requirements of social gaming and, if not, it should be regulated.

The Danish Gambling Act does not, as such, regulate eSports.

Fantasy sports are not, as such, regulated in the Danish Gambling Act.

"Skill games" with no element of chance are permitted under Danish law. Such games can be provided without a licence.

Blockchain is not accepted as currency according to the Danish Gambling Act.

There is no information available in this jurisdiction.

The provision of games covered by the Gambling Act is subject to duty under the Danish Gambling Duties Act. The duty percentage and the regulation and the frequency of payment vary depending on the type of game. Thus, in the following, the gambling tax rates will be outlined by sector.

The duty is based on a percentage of the GGR, which is the received stakes minus paid out winnings.

A negative GGR in one duty period cannot be carried forward for set-off against positive GGR in subsequent periods. Subsequently, if there is a negative GGR for one period, the duty must be declared at DKK0.

Marketing costs that are not actual winnings for the players (eg, bonuses and free spins) cannot be deducted when calculating the GGR.

Online and Land-Based Betting

The operator of online and land-based betting must pay a duty at 20% of the GGR. As regard to betting exchanges, the duty is 20% of the amount charged in commission. In both cases, the duty is due on a monthly basis.

Online Casinos

The operator of online casinos must pay a duty at 20% of the GGR. For poker and other cases where the gambling operator's profit is the commission charged, the operator must pay a duty at 20% of the amount charged in commission. In both cases, the duty is due on a monthly basis.

Land-Based Casinos

The operator of land-based casinos must pay a duty at 45% of the GGR minus the amount of special tipping chips plus an additional 30% on the part of the GGR that exceeds DKK4,087,800. The duty is due on a monthly basis.

Physical Gaming Machines in Restaurants or Gaming Arcades

The operator of physical gaming machines in restaurants or gaming arcades must pay a duty at 41% of the GGR. For gaming machines in restaurants, an additional 30% on the part of the GGR that exceeds DKK30,700 is added. For gaming machines in gaming arcades, an additional 30% on the part of the GGR that exceeds DKK255,500 is added plus DKK3,100 per machine up to 50 machines and DKK1,600 per machine exceeding 50. The duty is due on a monthly basis.

Non-profit Lottery and Prizes in Connection with Free Games

In regard to cash prizes, operators of non-profit lottery and prizes in connection with free games must pay a duty at 17.5% of the amount that exceeds DKK200. Regarding prizes consisting of goods or services (market value), such operators must pay a duty at 17.5% of the amount that exceeds DKK750. In both cases, the duty is due 15 days after the result of the Lottery has been decided.

Other Duties and Relevant Fees

In addition to these duties, a licensed online gambling operator must also pay an annual fee for the licence. The annual fee is fixed in classes varying from DKK55,900 to DKK5,031,000 (2019 level). The annual fee is due one month after the effective date of the licence and then on an annual basis.

Having a gaming machine is subject to an annual fee of DKK641 per gaming machine.

With the liberalisation of betting on horse racing, betting providers that provide gambling on horse racing will be charged 8% of the GGR of betting on horse races on Danish horse racing tracks. The fee will be calculated based on a three-month period.

Depending on the circumstances, the gambling operator may also be obliged to pay regular Danish company tax (particularly if the gambling operator is established/incorporated in Denmark).

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Denmark

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Trends and Developments


Introduction

After coming to the realisation that the Danish authorities were losing control of the Danish online gambling market, the Danish government decided to change its approach to the regulation of online gambling in the country. The Danish state-owned monopoly Danske Spil A/S was losing market share to unlicensed operators, and at this point in time the offering of online gambling from operators based in other EU member states constituted a significant majority market share.

New legislation was passed in Parliament in June 2010 and entered into force on 1 January 2012 that created a partial opening of the Danish market for privately owned operators to obtain a licence to offer betting and online casino.

Lottery games were and still are reserved for offering by state-owned operators.

The main objective politically behind the new legislation was to regain control over the offering of betting and online casino in Denmark, which was to be achieved by ensuring that the majority of the gambling activities conducted in Denmark was with operators holding a Danish licence and consequently subject to supervision and control from the Danish Gambling Authority (DGA).

Even before the new Danish gambling legislation entered into force, the legislation was recognised internationally as the most modern piece of online gambling legislation, and both the legislation and the Danish Gambling Authority were quickly recognised as role models throughout Europe both by operators and other regulators.

The key to this status is that although the taxes, at 20% of gross gambling revenue (GGR), are reasonably high, it has proven to be relatively straightforward to obtain a Danish licence and operate under the Danish legislative regime.

The Danish Gambling Authority has strengthened the so-called Danish model by having an open approach. The Danish Gambling Authority has traditionally shown a clear understanding that the efficiency and success of the Danish model is a high channelisation, meaning that the majority of transactions and gameplay takes place with licensed operators. And that this can only be achieved if the operators holding a licence are offered market conditions under which they can operate a profitable business.

Market Trends

Since the opening of the Danish market, there has been a very clear trend of growth in GGR both on betting and on online casino. In the first seven years in which the market has been open to privately owned operators to offer betting and online casino, the betting market measured in GGR has grown from DKK1,175 million in 2012 to DKK2,526 million in 2018, which corresponds to an increase of 115%. Similarly, regarding online casino (including poker), the GGR has increased from DKK870 million in 2012 to DKK2,158 million in 2018, which corresponds to an increase of 148% for the period.

While the market for online casino seems to continue a steady two-digit growth rate in per cent per year, the betting market seems to have found a more stable level. However, significant growth bumps can still be seen in the statistics in years of large sporting events such as the FIFA World Cup and the European Championship in football.

Although the numbers are a bit inflated due to the fact that bonus money wagered by players is not deducted but counts fully when calculating the GGR, the fact that there is a steady addition of new licence-holding operators every year is an indication that the industry still sees opportunities and potential in the Danish market.

More information on the statistics of the Danish market can be found on the website of the Danish Gambling Authority: https://www.spillemyndigheden.dk/en/statistics

Political Trends and Regulatory Development

In June 2018 the majority of the political parties represented in the Danish Parliament entered into a political agreement to make amendments to the Danish gambling regulations.

The objective of the adjustment to the regulation was to increase player protection and reduce the volume of advertisement for gambling in the Danish media.

Although the young and the vulnerable have been the focus of the political parties, more general measures of consumer protection were also included in the political agreement, to the effect that bonus terms should be simplified, terms and conditions must be clearer and easier to read, and bonus offerings should have limits.

Industry Code of Conduct

After the political agreement was concluded, the Danish Online Gambling Association and the Danish Gambling Authority arranged an opportunity for the Danish gambling industry to take the initiative to self-regulate through a Code of Conduct in an attempt to prevent new legislation and regulation that would be too rigid and damaging for the Danish market in the long term.

The Code of Conduct entered into force on 1 July 2019. The Code of Conduct’s main areas of focus were to increase the level of information provided to the player about the dangers of gambling, reduce the risk of offering gambling and advertising gambling products to minors and to call on the industry to reduce the amount of gambling advertisement in general.

Abiding by the rules of the Code of Conduct is voluntary to the extent that members of the Code of Conduct are bound by its provision but it has no binding effect on non-members and there is no legal requirement to be a signatory member of the Code of Conduct.

Risk of complete marketing ban

Following the general election held in Denmark on 5 June 2019, some Danish politicians have had to define themselves in new political roles as new Members of Parliament, as a party member in a struggling political party in opposition or as spokesmen in new areas.

Unfortunately, some of these politicians have been inspired by the very aggressive approach of the Swedish politicians and the Swedish Gambling Authority against the licensed gambling industry and the marketing ban in Italy, and have now managed to create a debate over the Danish gambling industry by suggesting that Denmark should also introduce a complete ban on advertisement for gambling.

The call for a marketing ban has gained a lot of traction in the media, and the debate is, as is not uncommonly the case, unfortunately based more on emotion than fact and the few facts that are used are often incomplete or false.

The Danish Online Gambling Association is fighting to at least be granted some time to see the effect of the Code of Conduct on the Danish gambling industry, before any radical regulatory changes are undertaken.

A complete marketing ban on advertisement of gambling products would be an immense threat to the licensed industry and regulatory regime. The experience in Italy after Italy introduced a complete marketing ban is that confusion is created about who is licensed and who is not. The non-licensed operators benefit tremendously from such circumstances and are able to use their commercial advantage of having no expenses concerning gambling tax and compliance. They can therefore offer better prices on their products than the licensed operators, who in turn are not allowed to advertise to defend their market share.

Long term, this could lead to a collapse of the regulated market and the Danish market would be back at a situation similar to the pre-liberalisation market conditions, where non-licensed operators supply more than 60% of the market with gambling services.

If the industry is not going to succeed in reducing the amount of advertisement for gambling services in the Danish mainstream media, then the risk that a complete marketing ban will see the light of day is considerable, since it is a seemingly easy fix to a complex problem, in line with populism at its best.

New executive orders on the way

A regulatory adjustment to the Danish gambling legislation is on the way as part of the political agreement mentioned above.

Currently, at the beginning of November 2019, it seems that the new executive orders on betting and online casino will come into force on 1 January 2020. The main changes to the regulations with the new executive orders are as follows.

Dormant accounts

Charging a fee for dormant/inactive accounts will no longer be allowed.

Website design

The provisions are expanded to no longer apply just to the website, but to all user interfaces and platforms. Further, in addition to what is already applicable, the website/user interface must also include information about the DGA helpline for problem gamblers, and contains information about the option to register as self-excluded in the Register of Voluntarily Excluded Persons (ROFUS).

The executive orders also include a new provision with a more specific description and rules about the use of the DGA logo on the website/user interface; eg, that the logo must be placed in the upper right or left corner of the website.

For online casino it is further going to be required that the clock that must be visible also needs to show time spend pr. Log in.

Responsible gambling

The new rules on responsible gambling seem to be copied from the new Swedish regulation. The executive order places an obligation for the player to fix a deposit limit. The operator cannot pre-determine or pre-check a limit. This must be an active choice for the player. However, the operator will be allowed to set an upper limit for deposits, which the player is not allowed to exceed. Further, the player shall have the option to choose if the limit should be daily, weekly or monthly.

The operator will also be obliged to monitor the player’s gambling behaviour and make a problem gambling risk assessment on all players to enable the operator to detect and react if a player shows signs of developing problem gambling.

Further, the operator must have policies and procedures in place to interact and intervene with players that show trends towards problem gambling, and have in place an internal training and educational programme for relevant employees to enable such employees to handle potential and actual problem gamblers.

The draft executive orders introduce more details on the DGA’s handling of ROFUS and the information requirements for the operators to inform the players about ROFUS. Most significantly regarding ROFUS, it will be a legal requirement that all recipients of advertisement from the operators will be cross-checked with ROFUS no more than 24 hours before distribution to ensure that self-excluded players registered in ROFUS will not receive marketing material.

Advertisement and promotions

Advertisement must include information about the age limit, the DGA helpline for problem gambling. information on the option of self-excluding in ROFUS and the DGA logo. In regard to bonuses and promotions, the following restrictions will be introduced:

  • deposit requirements to obtain a bonus or promotion reward may not exceed DKK1,000;
  • the reward may not exceed 100% of the value of the deposit, but no more than a value of DKK1,000;
  • wagering requirements will be limited to a maximum of ten times;
  • wagering requirements on winnings from promotions (bonus money and free spins);
  • if there is a wagering requirement attached to a promotion, examples explaining how many Danish kroner must be wagered before winnings can be cashed out must be provided;
  • games that contribute to the wagering requirement must contribute with 100%; and
  • the 60-day minimum time to comply with requirements attached to the promotion will be maintained as it is.

Promotions must not be offered to individual players, and the rules as they are will not be changed in this regard. However, the new rules specify that the differentiation between players based on their wagering may not be defined in a way that allows the group of players to which the promotion is offered to be smaller than 100 players.

Enforcement Trends

The DGA has a year long reputation and is recognised for being open and solution-oriented towards the operators, and using sanctions against operators only as a last resort.

Marketing

In regard to marketing of bonuses, the DGA has not been happy about the level of compliance from the Danish licence-holders and has launched an extensive enforcement campaign on its guidelines on “Compulsory disclosure of conditions when marketing a bonus offer”. In total, 26 of 27 operators that were reviewed failed the DGA’s compliance review and as a consequence the DGA has reported all 26 operators to the Danish police for violation of the Danish Gambling Act.

At this point in time the DGA does not have sufficient legal authority to issue administrative monetary sanctions, and the DGA consequently does not have any enforcement tool other than to initiate criminal proceedings against the non-compliant operators by reporting them to the police.

Once a clear and sufficient case law practice on the interpretation of the relevant rules and the sanction level has been established by the Danish courts, the DGA will most likely be granted the authority to issue administrative monetary sanctions so criminal cases for similar violations can be avoided in the future.

The issues in many of the pending cases are the interpretation of marketing regulations in the executive orders under the Danish Gambling Act and the underlying principles in the Danish marketing practices act (Markedsføringsloven), which is based on European Union law.

The guidelines of the DGA are only guidelines and represent the DGA’s interpretation of the rules. However, the guidelines are not binding legal rules, and the only competent institutions to interpret Danish law are the Danish courts.

All the pending cases are concerning bonus marketing on the operators’ own websites, which has been the main enforcement focus of the DGA in the past years. However, the DGA has announced that it will start looking at marketing in other media types during 2019 and 2020, and the first cases regarding marketing for gambling products and, in particular, bonus offers in social media are beginning to see the light of day.

In particular, marketing on social media is likely to be an enforcement focus that is going to be intensified by the DGA in 2020. The reason for this being that social media is often used to reach younger customers, and the political agreement partly reflected in the new executive orders is focusing on increased protection of young people.

AML

After some confusion between several government agencies in Denmark regarding the jurisdiction in connection with enforcement of the legislation regarding the combating of money laundering and the financing of terrorism, it has now been clarified that in regard to gambling operators and AML in connection with gambling, the DGA is the agency with jurisdiction.

Consequently, the DGA has published a guidance on AML regulation in regard to the offering of gambling in Denmark, and has started reviewing the AML policies and procedures of a number of operators.

One particular area of focus in these reviews is compliance with the requirement to have a whistle-blower programme established for all companies with more than five employees.

Finances

One of the requirements for obtaining a licence in Denmark is that the applicant can demonstrate that it can run its business economically and financially responsibly and in a professional manner.

Until now this has been an issue only in connection with the licence application process. However, since PWC won the contract to deliver financial assessments and to support the DGA in financial reviews of applicants and licence-holders, the DGA has announced that it will increase its efforts to review and follow up on the finances of the operators holding a licence in Denmark.

Such reviews will compare the annual reports with the budget submitted with the licence application and if the deviations are too large, the operator is likely to be requested to explain the circumstances causing the deviations. This includes both deviations in terms of better results and performance and deviations resulting in poorer performance than expected in the budget.

The review will also look at the financial structure supporting the applicant to ensure that operators holding a Danish licence have sufficient funding and financial solidity to be able to pay out large prices and adapt in cases of market decline and fluctuations on the international financial markets.

Conclusion

For a long time Denmark has been considered one of the new markets, but the latest trends and developments on the Danish market and the actions of the DGA suggest that Denmark is changing to be an established market, where the next stage is to have a clearer definition of the scope and understanding of the rules and regulations.

This can only be achieved through complaints before the administrative complaint boards in Denmark and, of course, through criminal procedures and civil litigation before the Danish courts, and an increase in this kind of case is therefore likely in the years to come.

As is the case in many other jurisdictions, the gambling industry has a very low acceptance and popularity, despite the fact that the majority of the population gambles regularly, and the political debate is turning against the industry.

So far, the gambling industry has been silent in the debate, leaving the spotlight to the shouting populist politicians that see gambling as an easy opportunity to get media attention and gain some popularity amongst voters for combating something “bad” and “dirty”.

This is a trend that constitutes a threat to the entire industry that should not be underestimated or taken lightly.

The industry is taking a lot more responsibility for its own compliance and the protection of its players than it is given credit for, and this is a message that should be communicated more intensely in the political debate in an attempt to get a more balanced and fact-based discussion rather than the very emotionally loaded debate that is currently being witnessed in an increasing number of jurisdictions.

Nordic Gambling

Flæsketorvet 68
1711 Copenhagen V
Denmark

+45 5190 1877

contact@nordicgambling.com www.nordicgambling.com
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Law and Practice

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Mazanti-Andersen Korsø Jensen was founded in 1853 and is Denmark's oldest law firm, with strong international relations. Today, the company represents a large number of Danish and international corporate clients. The firm is characterised by professional competence and integrity, and provides specialised legal advice within corporate and commercial, real estate, insolvency and estate management, transactions and dispute resolution. The media & entertainment team advises on all aspects of media and entertainment law, ranging from classic publishing agreements, agreements with collecting societies, record contracts, format agreements, merchandise agreements, sports events and concerts, and transactional work, to matters related to internet-based distribution forms and the complex legal challenges related to the new distribution forms of music, film, radio and television on all platforms, including apps and social media. Mazanti furthermore has the largest and most experienced gaming and gambling law group in Denmark, with many first mover matters that merge issues regarding sport, online entertainment, marketing and gaming, as well as matters in the borderland between social gaming and gambling.

Trends and Development

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Nordic Gambling is the only legal firm with established offices in both Denmark and Sweden that specialises in gambling-related law. The partners of Nordic Gambling are recognised among the leading legal experts in the gambling industry. The firm has gained extensive experience in the industry from working with operators, suppliers, service providers and government regulators. Nordic Gambling has been closely involved in the development of the law and regulation in a number of European jurisdictions, including Denmark and Sweden. The team of five are qualified to assist in any matter related to gambling, including licensing, compliance advice and public affairs. It also provides advice in areas closely related to gambling, including anti-money laundering, data protection, marketing and sponsorship.

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