Agreement on partial liberalisation of the gaming market

Date 18 feb. 2010

The Danish Government (Venstre and the Conservative People’s Party), the Danish Social Democrats, the Danish Folk Party, the Socialist People’s Party, the Danish Social-Liberal Party and Liberal Alliance agree to implement legislation on a regulated, partial liberalisation of the Danish gaming market.

 

Among other things, the legislation will include



  • a licence scheme, according to which gambling providers must have a Danish licence in order to offer gambling activities in Denmark
  • rules to secure a responsible gaming market – which contributes to fighting compulsive gambling, among other things
  • a clear-cut delineation between the monopolised games and the liberalised games so that the monopolised games are protected against competition from gambling providers who do not have a licence to offer monopolised games
  • protection against illegal providers by means of payment blocking, internet blocking and by maintaining the current ban on advertising
  • a 20% duty of the gross gambling revenue (winnings deducted from stakes) at the liberalised part of the gaming market for bets and online casino games, incl. online poker games
  • a raising of the amount for prevention of compulsive gambling which is decided in the Finance and Appropriation Act to provide greater security, and
  • a future distribution model according to which the receiver of profits in 2012 is guaranteed an amount which actually corresponds to the distribution in 2008 (nominally approx. DKK 1.7bn) plus DKK 35 million. The distribution is connected to the profit of the monopoly part of Danske Spil and the profit from Klasselotteriet. The model is to be evaluated in 2014.

A legislation which consists of a gambling law that regulates the gaming market (licences etc.) and a law of duty. Additionally, a distribution law which concerns the distribution of the funds for sports- and cultural purposes etc. and an ownership law concerning the State’s ownership in Danske Spil.



Agreement concerning legislation on partial gaming liberalisation between the government (Venstre and the conservative people’s party) the Danish Social Democrats, the Danish Folk Party, the Socialist People’s Party, the Danish Social-Liberal Party and Liberal Alliance

 

  • the parties agree to implement legislation regarding a regulated, partial liberalisation of the Danish gambling market, which consists of a gambling law, a law of duty, a distribution law and an ownership law and which contains, among other things,
  • a clear-cut delineation between the monopolised games and the liberalised games so that the monopolised games are protected against competition from gambling providers who do not have a licence to offer monopolised games
  • a licence scheme, according to which gambling providers must have a Danish licence in order to offer gambling activities in Denmark
  • rules to secure a responsible gaming market – which contributes to fighting compulsive gambling, among other things
  • protection against illegal providers by means of payment blocking, internet blocking and by maintaining the current ban on advertising
  • a 20% duty of the gross gambling revenue (winnings deducted from stakes) at the liberalised part of the gaming market for bets and online casino games, incl. online poker games
  • a raising of the amount for prevention of compulsive gambling – so that the amount constitutes DKK 32 million in 2012 (2009-level) – where the funds for this are prescribed in the Finance and Appropriation Act and the exact distribution is agreed between the contracting parties; in 2011 – in which the opening of the gaming market takes place – an amount of DKK 5 million is allocated for prevention, however, the total amount for prevention of compulsive gambling in 2011 constitutes at least DKK 25 million.
  • an evaluation of the compulsive gambling scheme will be conducted in 2013, in preparation for the Finance Act 2014.
  • a future distribution model according to which the receivers of profits in the base year 2012 (based on the fiscal year 2011) are guaranteed an amount corresponding to a level which is actually DKK 1,610 million corresponding to the distribution in 2009 (nominally approx. DKK 1.7bn, based on the Consumer Development), which must be added DKK 35 million. A ceiling limit is imposed in the base year which must be regulated forward according to consumer prices. After 2012, the profit receiver and the Government will share the risk at a 50/50 scheme, corresponding to the applicable scheme.
  • the distribution is connected to the profit from the monopoly part in DS and the profit from Klasselotteriet which is maintained as an independent company. This means that the profit receiver is not connected to the liberalised market.
  • It has been agreed that the distribution scheme must be evaluated in 2014.
  • In the period from the commencement of the future gambling law to the time of effect 1 January 2011, the extent of illegal gambling is given special attention in order to discourage it.


Facts on the Danish Gambling Market etc.

 

  • aggregate sales (stakes) are estimated to be approx. DKK 25bn in 2008 and this does not include the stakes from the land-based casinos and the online casinos (incl. poker) as the stakes are here difficult to compute because of the games’ character (quick games with a very high return percentage where winnings are used for new stakes)
  • gross game earnings (the gamblers’ net consumption of games) is estimated to be approx. DKK 7.7bn in 2008, including the land-based and the online casinos. This means that every Dane over the age of 18 (approx. 4.3 million people) spend approx. DKK 1,800 (net), or approx. DKK 150 a month, on gambling.
  • The foreign bookmakers have a turnover which is estimated to be almost the same as the turnover of Oddset at Dansle Spil – approx. DKK 2.1bn and DKK 2.2bn, respectively. If you look at the gross gambling earnings, these are much lower with foreign bookmakers, cf. appendix, which is caused by the fact that they, on average, have a much higher return percentage than Danske Spil – 92% and 75%, respectively.
  • the Danes have a net consumption in online casinos with the foreign game providers of an estimated DKK 350 million.
  • Denmark is believed to have approx. 5000 compulsive gamblers, cf. SFI’s (The Danish National Centre for Social Research) survey from 2006. The number is lower than what was found in corresponding surveys from Norway and Sweden.
  • the amount for prevention of compulsive gambling (from gambling machines) has fallen as a consequence of a declining turnover from the gaming machines. In 2007 the amount was approx. DKK 23 million and is expected to be approx. DKK 20 million in 2009.

After the Bill

 

  • the games are delimited and this is expected to stabilise the turnover from the monopoly games – Lotto etc.
  • the gross gambling earnings from the liberalised games are expected to increase by approx. DKK 130 million. The amount is composited by the decreasing gross gambling earnings on bets as a consequence of an expectation that the return percentage for Danske Spil’s present bets and increasing gross gambling earnings for the online casino games since Danske Spil has not offered online casino games to a larger extent in the past and has not been offering online poker. Furthermore, the opportunity for foreign game providers to achieve a Danish licence is expected to result in an increased turnover.
  • The funds for prevention of compulsive gambling is made independent of turnover – is prescribed in the Finance Act – and is increased by approx. DKK 12 million (to approx. DKK 32 million) compared to the amount in 2009. This provides an increased security for the funds and an even greater focus on the area.


Table 1. Turnover in the Danish gambling market in 2008 listed by game category



2008



Stakes

Gross gambling earnings



Million DKK

Danske spil





Bets





The pools etc.

165

85

Oddset

2,225

620

Horse racing and dog racing

610

130

Lotteries etc.





Lotto games

3,870

2,130

Joker

530

295



Keno

185

75

Scratch lottery

905

425

Bingo

130

45

Other games

125

40

Total, Danske Spil

8,745

3,875

Other Danish game providers





Klasselotteriet

655

220

Lotteries in which the prices are goods and lottery for the encouragement of agriculture

175

65

Humanitarian lotteries

405

245

Bingo

420

190

Gaming machines

12,425[1]

2,235[2]

Casino

[3]

425

Total, other Danish game providers

14,080

3,380

Foreign game providers





Bookmaker games in foreign countries

2,100

180

Online casino games and online poker

[4]

350

Total, foreign game providers

2,100

430







The gaming market in total

24,925

7,685



[1] Approx. DKK 2,200 million in stakes and approx. DKK 395 million in gross game earnings constitute Danske Automatspil, a subsidiary company of Danske Spil.

[2] Approx. DKK 2,200 million in stakes and approx. DKK 395 million in gross game earnings constitute Danske Automatspil, a subsidiary company of Danske Spil.

[3] These are games with a very high return percentage (usually, more than 90%) where the actual game is completed very fast and where an actual stake is not calculated.

[4] These are games with a very high return percentage (usually, more than 90%) where the actual game is completed very fast and where an actual stake is not calculated.