Denmark Adapts with a Tax Raise for 2021

Denmark has approved a raise of taxes on licencees.

The Tax

Set to take effect in 2021, the tax on Danish licenced operators will rise to 28% of GGR, with the expectation of raising an additional DKK150m (£17.1m/€20.1m/$22.3m) in new tax revenue.

The current rate of 20% on GGR has been in place since the 2012 opening of the Denmark market.

Land v Online Play

The government pointed out that online betting and gaming taxation remains lower than on land-based casinos and gaming machines, with casinos paying 45% GGR tax, plus another 30% on revenue above DKK4m.

Gaming machines are taxed at 41% GGR, and additional 30% for revenue over DKK4,000 at restaurant-based machines, while kicking in at DKK250,000 in gaming machine halls.

Benefits

The measure seeks to improve regulation while increasing funding for problem gambling treatment. It is also projected to generate DKK20m in additional taxes from 2021, up to DKK150m.

Policy Landscape

The measure reflects a shift in policy precipitated by a new collective governing model spearheaded by Denmark’s Social Democratic Party-led minority government, the new ruling party elected into office in June of this year. Other contributors to the budget legislation include supporting parties Red-Green Alliance, Socialist People’s Party and Social Liberal Party, all new coalition members with their own views on gaming to be integrated.

Reinvestment

The additional revenue to be gained from the hike is intended for healthcare, education and the country’s welfare system. Revenues will further be reinvested in the DKK25bn Green Future Fund, a project seeking to promote environmentally friendly businesses and initiatives.

New Influences

The new code of conduct seems to be a key driving factor. A series of minimum standards for advertising and player protection define a new direction for regulation in Denmark emphasising the priority of advertising and player protection was introduced last July 1st. The new codes were developed by regulatory body Danish Online Gaming Association (DOGA); slot machine operator body Dansk Automat Brancheforening; casino operator group Dansk Kasinoforening and Aarhus-based Royal Casino.

Outlook

With slight declines for Q3 to DKK1.61bn, the new measures should not be seen as cause for concern, but rather a tribute to the Danish jurisdictions ability to proactively respond to early detected inconsistencies in its model.