Denmark Announces 40% Tax Hike for Online Gambling Operators

Date Created: Dec 03
Written by Jerico

The government of Denmark has bared its plans to raise online gambling taxes from 20% to 28% as part of its brand new Finance Act.

The measure is seen as a way to potentially add DKK150m (or US$22.2m) that is needed to boost the Danish government’s yearly budget. The Act proposes that the gambling tax increase will not be introduced until 2021.

The 8% increase is basically equivalent to a 40% hike in tax obligations for gambling operators who already have licenses. Denmark’s government has emphasized the fact that land-based gambling operators incur much higher tax rates than online ones.

Casinos pay 45% tax, while a 41% rate has been established for slot machines placed outside casinos. There are also top-up taxes slapped on operators whose revenues reach specific benchmarks. A 30% surplus exists on restaurant-based machines producing more than DKK4,000 (or $595). The same rate must be paid on gaming machine hall earnings more than DKK250,000 (or $37,166).

The Danish government has stated the new revenue generated from modifications in gambling taxation would be used to fund different initiatives involving healthcare, education, and the welfare system. A substantial chunk is earmarked for the DKK25bn (or $3.71bn) Green Fund, which is geared at investing in environmentally friendly businesses.

The increase, while considerable, is not at all surprising for operators. Advertising for gambling-based products in Denmark has hit a record high on both TV and radio in 2019. Danish license holders have also opted to use a new voluntary code that would check any excessive marketing attempts.

The Danish government is also said to be wary of the potential impact of problem gambling in the country. It has backed the Spillemyndigheden, the national regulatory agency, and its popular self-exclusion registry, ROFUS.

The Danish Gambling Authority has also announced its new gambling phone line initiative alongside its existing live chat facility.

The latest forecast for Q3 in 2019 saw gambling profit in Denmark dip slightly by 1%. It produced a total of DKK1.61bn ($24m), compared with DKK1.63bn ($24m) in Q3 of 2018.