Online Gaming: Danish Legislation Needs Amending

by Ulrika Lomas, Tax-News.com, Brussels

12 October 2009

The European Commission has issued a detailed opinion against a Danish proposal to regulate online gaming and betting. The draft legislation is intended to regulate both the online and offline gaming and betting markets in Denmark.

Sigrid Ligné, Secretary General of the European Gaming and Betting Association (EGBA), said: “We support the Danish government’s intention to move towards a regulated opening of the online gaming market, but this has to be done in compliance with EC law requirements. We welcome the European Commission's continued resolve to ensure that all gaming and betting legislation in the EU complies with the core principles of the EC Treaty.”

The Danish draft law was notified to the Commission and the other Member States on July 7, 2009. The draft text was made publicly available upon notification but the Danish government later invoked the confidentiality procedure.

According to the EGBA, a number of key provisions are highly doubtful under EC law, including:

• the licensing regime fails to take into account securities and controls already offered by other EU jurisdictions, in conflict with jurisprudence of the European Court of Justice;
• the continued monopoly on inter alia pool betting for horse racing;
• the introduction of ISP and financial transactions blocking and a marketing ban; and
• the prohibition of non-Danish residents participating in Danish licensed games.

According to Ligné: “EU consumers demand a diverse, safe and secure online gaming and betting offer. More and more Member States are responding to these demands by moving away from their existing system of a gambling monopoly to a licensing system adapted to the Internet. We support the Danish government's intentions but emphasize the need to ensure that any new legal framework is compliant with the EC Treaty. We would welcome an opportunity to share our expertise and knowledge of other licensing regimes in the EU to ensure an effective regime can be introduced at the earliest opportunity.”

The detailed opinion extends the standstill period until 9 November, during which time Denmark cannot adopt its draft legislation. Denmark is required to reply to the Commission’s views before adopting the legislation. If Denmark adopts the current text without taking into account the Commission’s objections, the Commission can immediately launch infringement proceedings.

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