European Commission Investigates Denmark Internet Gambling Tax

Denmark’s national lawmakers are bucking trends with a tax proposed under new Danish gambling laws.

Typically, national legislatures try to pass tax bills which levy greater taxes from internet casinos than brick-and-mortar casinos. This maneuver is intended to defend entrenched land-based casino operators who fear losing business to upstart online casinos. The Danish government has curiously offered internet gambling firms a lesser tax rate. While some physical casinos are expected to pay a 75% tax rate, after January online casinos in Denmark will only be expected to pay a relatively miniscule 20%.

On the surface, it would seem such a policy, far from the protectionism that haunts both Western and Eastern Europe actively invites competition. In fact, Denmark resolved to terminate their gambling monopoly back in 2009. However, the European Commission (EC) has received complaints against this proposed low tax rate.

For the EC, it won’t be enough that competition is actually allowed, they are concerned that such a distinction creates an unfair competitive advantage for online casinos. For reasons which are not presently clear, it seems that this could be a problem regardless of whether those internet casinos are actually based in Denmark.

Whatever their reasoning, the EC has launched a formal investigation. Morover, the EC is now soliciting opinions from other European Union (EU) members. If the EC concludes that the new tax rate provides an unfair competitive advantage to online gambling sites in Denmark, they will be able to deny implementation of the low rate.