The EU Commission has approved rules on duties on online games

Date 21 sep. 2011
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The EU Commission has concluded that the state subsidy rules of EU allow for lower duties on online casino revenues than on land based casino revenues to be introduced.

The reason for the approval of the different duties is based on the positive consequences that liberalisation will have on the gaming industry in Denmark. The Commission has also estimated that these consequences more than compensate for the distortion of competition.

The case

On 15 December 2010, the Commission published a notice saying that it had initiated a formal investigation of the taxation of income according to the act on gaming duties that has been approved by the Danish Parliament on 4 June 4 2010. Enforcement of the act was delayed until the Commission had approved the taxation.

Due to complaints from land based casinos, the main focus of the investigation was to find out whether the lower duties on income from online casinos compared to duties on income from land based casinos established an unfair competitive advantage. According to the Act on Gaming Duties, online suppliers of casino games and gambling must pay a duty of 20% of their gross income while the land based casinos and gaming halls must pay a 75% duty. Furthermore, the Commission has received complaints saying that the act on gambling is in conflict with EU rules on state subsidy.

It follows from the EU Commission’s decision that the difference between the duty on online based suppliers and the duty on land based providers is in fact state subsidiary, but it is nevertheless in accordance with EU regulation because the positive consequences of the liberalisation compensate for the distortion of competition caused by the act on gaming.

Consequence of the decision

The consequence of the decision is that the measures which prevented the act from coming into force are gone. Therefore the act can now enter into force.

If you have any questions or require any additional information on the above, please contact partner Claus Molbech Bendtsen ( or junior associate Kim David Lexner (

The above does not constitute legal counselling and Moalem Weitemeyer Bendtsen does not warrant the accuracy of the information. With the above text, Moalem Weitemeyer Bendtsen has not assumed responsibility of any kind as a consequence of a reader’s use of the above as a basis of decisions of considerations.