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Gambling law in Denmark

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Taxes

Danish games of chance are not subject to VAT (the standard rate of 25%) except for certain slot machines (machines without cash prizes located in mobile amusement parks).

The profits on games, lotteries and betting on the Faroe Islands and in Greenland accrue to the Faroe Islands and Greenland respectively.127

Lotteries128

Prizes in cash are subject to a 15% tax on the part that exceeds DKK 200 (approximately EUR 26) cf. the Prize Duty Act, regardless of whether it is Lotto provided by Dansk Tipstjeneste,129 the Class Lottery130 or a charity lottery, e.g. Landbrugslotteriet or Varelotteriet.

131 Other prizes (not prizes in cash) are subject to a 17.5% tax on the part that exceeds DKK 200 (approximately EUR 26). The prize duty is payable by the prizewinner but collected by the provider of the lottery. The prizes are however exempt from income tax.

In addition to the duties payable of the prizes Dansk Tipstjeneste pays 16% of the total stake as a tax132 but no standard company tax. The profit generated after payment of tax to the Danish State, the prizes and administrative expenses, depreciations, provisions etc. and dividend goes to charitables causes and non-profit purposes.

In addition to the duties payable of the prizes Det Danske Klassenlotteri pays a license fee that amounts to 6% of the total stake.133 Det Danske Klasselotteri A/S also pays the standard company tax of 28%.

Casinos

The tax for casino gaming:134

– if the Gross Gaming Revenue is EUR 536,655.98 (DKK 4 million135) or below the tax rate is 45%.
– If the Gross Gaming Revenue is above EUR 536,655.98 (DKK 4 million) the tax is EUR 241,495.19 (DKK 1,800, 000: 45% of 4 million) and 75% of the rest.

Machines outside casinos

There is a fixed tax of EUR 100 (DKK 750) per machine per year.136

For gaming machines containing prize money the tax is 40% on the gross gaming revenues.137

Restaurants with gaming machines also have to pay an extra 30% tax on the gross gaming revenues that exceed EUR 4,021.93 (DKK 30,000).

Gaming halls have to pay an extra 30% tax on the gross gaming revenues that exceed EUR 33,522.99 (DKK 250 000). This limit is increased by EUR 402.265 (DKK 3,000) per machine if the total number of machines is below 50 machines.138 If the total number of machines is 50 or above, the limit is increased by EUR 402.265 (DKK 3,000) per machine for the first 49 machines and by 201.117 (DKK 1,500) per machine for the rest.

Betting

The tax on games and betting is as starting point:

– 16% of the total stake139.

However for the following types of betting the tax is either:

– Bookmaker betting: 30% of the amount by which the stake exceeds the prizes (the Gross Gaming Revenue) 140 or
– Totalizator games: a monthly tax of 11% of the amount for which the stake in totalisator betting on horse or dog racing exceeds the prizes (Gross Gaming Revenue) and an additional tax of 19% of the monthly Gross Gaming Revenue exceeding EUR 2,226, 666 (DKK 16,700,000).141

Dansk Tipstjeneste A/S has a license to organise betting. The profit generated by totalizator betting on the individual horse racing track shall accrue to the track in question. This profit shall be computed to 21,25 % of the revenue from the totalizator betting on the individual horse racing track.142

At local totalizator games143 in connection with dogs and horses the tax is 1% of the part of the stake that belongs to a prize-game or betting-game and 11% for the part of the stake that belongs to other kinds of games.144 V5 and V6 games are exempted – they always pay 16% tax.

Totalizator games in connection with other forms of betting are taxed as follows when:145

– If the stake sum is not above EUR 3,351.96 (DKK 25,000) the tax is 10%.
– If the stake sum is above EUR 3,351.96 (DKK 25,000) but not above EUR 6,704.11 (DKK 50,000) the tax is EUR 335.185 (DKK 2,500) + 15% of the rest.
– If the stake sum is above EUR 6,704.11 (DKK 50,000) but not above EUR 13,408.20 (DKK 100,000) the tax is EUR 838.012 (DKK 6,250).
– If the stake sum is above EUR 13,408.20 (DKK 100,000) the tax is EUR 2,178.81 (DKK 16,250) + 25% of the rest.

If the profit from the totalizator is significantly higher than can be assumed reasonable for the use of the permit holder’s own purposes or for the purposes that he naturally supports, the Minister of Taxation can demand, after negotiations, that the permit holder gives a certain amount to charitable causes or other good causes.146 This provision has never been put to use147

Bingo

Regarding bingo there is no tax on the turnover. Prizes in cash are subject to a 15% tax on the part that exceeds EUR 26,000 (DKK 193,931.48). On the other prizes there is a 17,5% tax on the part that exceeds EUR 26,000 (DKK 193,931.48). These taxes are only paid when the bingo is public.148

Sales promotional gambling

Commercial games are submitted to taxation after the statutory decree nr. 636 of July 27 on taxation of lottery earnings that in Denmark concern lotteries, draws and contests which are considered as public.

Gains in money are taxed 15% of the part that exceeds EUR 26.8216 (DKK 200). Other gains are taxed 17.5% on the value of the prize that exceeds 26.8218 (DKK 200). Despite the fact that the taxation concerns the players it is the organizer of the lottery who is obliged to retaining and playing the taxation to the Danish Taxation Ministry.

Charity

A gaming hall can arrange a gamble with money that goes to charitable purposes. This will reduce his tax (see machine gambling outside casinos) with 95% on the part that according to art. 23 exceeds 30% of the gross gaming revenues.149 Beside the slot machine gambling outside casinos the monies from Dansk Tipstjeneste, charity lottery e.g. Landbrugslotteriet or Varelotteriet, and local bingos and lotteries, also goes to charitable purposes150.

LISTING

LEGISLATION ENACTED

General

– Lovbekendtgørelse 2005-12-02 nr. 1146 om afgift af gevinster ved lotterispil m.v. (Prize duty act)
– Bekendtgørelse 1999-12-03 nr 878 om indbetaling af afgift af totalisatorspil (Payment of Duty from Totalizators Regulation)
– Bekendtgørelse af lov 2000-07-17 nr 699 om markedsføring (Marketing Practices Act)
– Bekendtgørelse 2005-09-27 nr. 909 af straffeloven (Criminal Code)
– Bekendtgørelse nr 1152 af 16/12/1994 om fastaettelse af beløbsgraenser i konkurrencer (Regulation on the determination of authorized winnings through draws and prize competition)
– Lov 2005-05-18 nr 325 om ændring af visse skatte- og afgiftslove, arbejdsmarkefondsloven, opkrævningsloven og miljøbeskyttelseloven (Amendment act of certain Tax and Duty Laws, Labour Market Funds Law, Collection Money Order Law, Environnemental Protection Law)
– Bevilling till Dansk Tipstjeneste A/S til at afholde visse spil, lotterier og væddemål. (Licence granted to Dansk Tipstjeneste A/S to supply certain Games, Lotteries and Betting)

Lotteries

– Lov nr 18027 06/03/1869 om Forbud mod lotteri m.m.(Lottery prohibition act)
– Lov nr 63 af 01/04/1913 om Indskrænkning i Adgangen til Omsætning af Lotterisedler m.m. (Restricted access of the Circulation of Lottery Tickets Act)
– Bekendtgørelse 1956-02-13 nr 29 om afgift af gevinster ved offentlige bortlodninger m.v. (Regulation on duties from lotteries)
– Bekendtgørelse 2003-05-26 nr 408 om kontrol og overvågning i medfør af lov om Det Danske Klasselotteri A/S (Klasselotterilove) og lov om visse spil, lotterier og væddemål (tips- og lottoloven) (Regulation under the Pools and Lottery act)
– Bekendtgørelse 2003-11-12 nr 901 af Lov om Det Danske Klasselotteri A/S (State lottery act)
– Lovbekendtgørelse 2003-12-11 nr 1077 om visse spil, lotterier og væddemål (Pools and Lottery act)
– Cirkulære om afgift af gevinster ved offentlige bortlodninger (CIR nr 21 20/02/1956) (Circular on taxes of profit from public lotteries)
– Cirkulære om bortlodning (CIR nr 147 af 01/08/1994) (Circular under the Lottery prohibition act)
– Vejledning til brug for politiet ved overgangen til det nye bortlodningscirkulære (VEJ nr 11032 af 31/01/1984) (Guidelines for Police Oficials during the Transition to the New Lottery Circular)

Bevilling till det Danske Klasselotteri A/S til at drive klasselotteri i Danmark. (Licence granted to Danske Klasselotter to organize class-lottery in Denmark)

– Bevilling till Landbrugslotteriet 24/3 1994 (Licence of the Lottery for the benefit of farmers)
– Bevilling till Vare- og Industrilotteriet 30/10 1996 (Licence granted to the Products- and Industry Lottery)

Casino Gaming

– Bekendtgørelse 1994-06-13 nr 496 om spillekasinoer (Casino Act Regulation)
– Bekendtgørelse af lov 1994-10-10 nr 861 om spillekasinoer (Casino act)
– Lovbekendtgørelse 2005-12-02 nr 1145 om afgift af spillekasinoer (Casino duty act)

Machine Gambling Outside Casinos

– Bekendtgørelse af lov 2002-07-25 nr 631 om gevinstgivende spilleautomater (Regulation under the Slot machines act)
–– Cirkulære om Spilleautomatlovensagsudlægning (CIR nr 207 af 22/12/2000) (Circular on Slot Machines Act)
– Cirkulære om administrative bødefastsættelser ved overtrædelse af spilleautomatloven (CIR nr 39 af 30/04/2002) (Circular on Stipulation of Fines for Violation of the Slot Machines Act)

Betting

– Lovbekendtgørelse 2002-05-08 om lokale totalisatorspil (Local totalizator act)
– Lovbekendtgørelse 2006-01-16 nr. 22 om locale totalisatorspil, art. 2B.
– Bevilling till Dantoto A/S til at foranstalte væddemål i forbindelse med heste- og hundeløb. Licence granted to Dantoto A/S to organize Betting on Horse – and Dog Racing

Bingo

– Cirkulæreskrivelse om bankospil ved brug af privatradioanlæg (CIS 11705 af 13/11/1986) (Circular Letter on Bingo at Private Broadcasting)

Media Gambling Services

– Cirkulæreskrivelse om bortlodninger (vejledende retningslinjer for bladkonkurrencer og lotterier set i relation til Markedsføringslovens § 8) (CIS nr 11450 af 30/07/1982) (Circular Letter on Lotteries (Guidelines for newspaper contests and lotteries related to
the Marketing Practices Act)

Sales Promotional Gambling

– Bekendtgørelse af lov 2000-07-17 nr 699 om markedsføring (Marketing Practices Act)

Charity Gambling

– Our research did not reveal any relevant information

JURISPRUDENCE

– Østre Landsret 14th of September 2000 Gerhard & Jörg Schindler v. the Danish Ministry of Justice and Ministry of Taxation.

BARRIERS

Panorama

General

Our research did not reveal any relevant information.

Lotteries

A lottery is an arrangement where the participants, against the payment of a stake, obtain a chance to win and where the winning depends on the hazard.151

The Lottery Prohibition Act states a general prohibition against any lotteries organized in Denmark or abroad.152 In addition to the general prohibition against lotteries there’s a general prohibition against games of chance in article 203 and article 204 in the Criminal Code. 153 An exception is made if an authorization has been obtained. An authorization can be obtained for lotteries with a charitable cause and where the clientele is restricted to a city or similar.

According to the Act on Certain Games, Lotteries and Betting article 1, the Minister of Taxation shall also be authorized to issue licenses for offering lotteries against payment of tax to the state: The Minister of Taxation shall be authorized to issue licenses for offering games, lotteries and betting against payment of tax to the state.

Article 2 stipulates that the license mentioned above only shall be granted to one company:

“(1) A license pursuant to section 1 of this Act shall only be granted to one company. Any company in which the share capital is subscribed by the company mentioned in the first sentence hereof may, however, be granted a betting license as mentioned in section 1 a. (3) of this Act.
(2) A license can be granted for a period of up to five years at a time. Renewal of the license requires the approval of the Danish parliament’s Finance Committee.
(3) The companies mentioned in subsection (1) hereof shall be set up as limited companies.

The Danish Companies Act shall apply to the companies unless otherwise is stated in this Act. The Articles of Association of the companies and changes to such Articles, if any, shall be approved by the Minister of Finance.”

Further on it is regulated that the company set up shall be a limited company with a share capital of at least EUR 67,046.68 (DKK 500,000).154 The state shall subscribe to 80 % of the share capital, while the Danish Sports Association and the Danish Gymnastics and Sports Associations subscribe to 10 % each.

The company that has been set up according to the regulations mentioned above is the Dansk Tipstjeneste A/S.155 The license has been granted for a year at a time for the last four years. The last license was granted the 12 December 2005 for the period 2006-01-01 to 2006-12-31.156 In the last license granted to Dansk Tipstjeneste A/S it has been added that the advertising of the games mustn’t give the impression of being aggressive neither in form nor content.157 On the website www.tips.dk Dansk Tipstjeneste is obliged to have visible information about being monitered by the Danish Gambling Board, including a direct link to the authority.158 Dansk Tipstjeneste A/S must pay the costs for the Minister of Taxation’s supervision and inspection of its activities.159 According to article 5 no less than 45% of the stakes shall be paid out as prizes. Before the expiry of the license Dansk Tipstjeneste A/S must forward to the Minister of Taxation a statement explaining how the company has complied with the provisions on the license.160 In the license granted to Dansk Tipstjeneste A/S, the Danish Ministry of Taxation stresses that Dansk Tipstjeneste A/S has an obligation to supply attractive games. This is mainly to “attempt to avoid Danish punters demanding games from games suppliers operating illegally in Denmark, including via the internet”.161 Further on the Ministry states that Dansk Tipstjeneste A/S, in its marketing and development of products, shall attempt “to channel Danes’ betting activities into legal, controlled games while keeping consumption at a moderate level in relation to a free market situation”.

The company’s profit generated, after payment of tax to the Danish State, the prizes and administrative expenses, depreciations, provisions etc. and dividend, goes to charitable causes and no-profit purposes.162 It is apportioned in the following way:

1) 66,44 % to the Ministry of Culture
2) 12,67 % to the Ministry of Education
3) 3,39 % to the Ministry of Environment
4) 10,42 % to the Ministry of Social Affairs
5) 2,95 % to the Ministry the Interior and Health
6) 0,39 % to the Ministry of Science, Technology and Innovation
7) 3,74 % to the Ministry of Finance

There are also specific regulations on how the different ministries shall apportion their share to the Danish sports organizations. 163

Dansk Tipstjeneste complies with Danish marketing law regulations and with the ICC’s international code on advertising. Dansk Tipstjeneste has in addition and for many years had internal guidelines on how Dansk Tipstjeneste should market its products, including with respect to children and youth. The guidelines include descriptions of Dansk Tipstjeneste’s duty as a responsible gambling provider to always maintain a balance between offensive and efficient marketing and to ensure that marketing is not offensive or encourages irresponsible gambling.164 Dansk Tipstjeneste has had internal guidelines for product development with respect to gambling addiction since 2004. As a part of these guidelines, Dansk Tipstjeneste has developed a traffic light system, which indicate whether a game or future planned game requires special monitoring or any restrictions in the form of amount or quantity restrictions before it can be developed.165

The following self-regulation covers the gambling services provided by Dansk Tipstjeneste A/S:166

– An age limit of 16 years for purshase of gambling services at the agents.
– An age limit of 18 years for purshase of:

*The game Trackside,
*gambling via www.tips.dk, and
*Lotto Service (a subscription to automatic renewal)

Nevertheless, Dansk Tipstjeneste’s marketing must not encourage gambling beyond gambler’s capacity or encourage gambling by the young. Games marketing must therefore never target children and youths under 18 years, which should also be reflected in
communication design and media selection167.

– A limit on the total stake to be wagered:

*EUR 670.386 (DKK 5,000) a day on all games on ww.tips.dk (not scratch cards where the limit is EUR 67.0392 ( DKK 500) a day).
*The limit of EUR 670.385 (DKK 5,000) a day also includes bank transfer.
* EUR 13,407.78 (DKK 100 000) a year.
* However there is an additional limit on the total stake to be wagered of EUR 201.146 (DKK 1,500) a week if Lotto service is used (a subscription to automatic renewal).

There are essentially no stake limits for games purchased via Dansk Tipstjeneste’s agents.

However, in 2004, Dansk Tipsjeneste introduced a stake limit on Dansk Tipstjeneste’sbookmaker game Oddset, which limits the individual gamblers to stakes of EUR 670.385(DKK 5,000). The reason for this was Dansk Tipstjeneste’s desire to limit the opportunity forhigh stake gambling and therefore limit the risk of gambling addiction and criminality.168There are three regular lotteries operating on a national scale that have been given anauthorization, Landsbrugslotteriet, Varu- og Industrilotteriet and Danske Klasselotteriet.

The authorizations for Landsbrugslottery and the Varu- og Industrilottery have been granted by the Minister of Justice in accordance with article 2 section 2 in the Act on Lottery Prohibition:169

“All of the special permits given for lotteries shall, nevertheless, continue to be valid during the time, for which they have been granted, and there will in the future be possible to grant permissions for lotteries with exclusively charitable causes.”

In the Public Notice on Lotteries it is stipulated that organisations domiciled in Denmark can receive a license to hold a lottery:170

Lottery permit is granted by the director of the police to a, in this country, domiciled organisation, institution or committee that is composed of at least three, in this country, domiciled persons.

Article 2 specifies the conditions for a permit to be granted:

(1) A lottery permit can be given in the benefit for charity or other causes that are for the public good.
(2) Lottery permit cannot be given in the benefit for political purposes.
(3) Lottery permit cannot be given where the prize will be won due the gambler’s choice of individual numbers or indications.
(4) Lottery permit for machines or electronic terminals cannot be given.

There is also the state lottery Danske Klasselotteri A/S that has permission to organise lotteries.171 The license has been granted for a year at a time for the last four years. The last license was granted the 12 December 2005 for the period 2006-05-01 to 2007-04-30.172 The conditions stressed in the licence to Dansk Tipstjeneste also apply to the Class Lottery, Danske Klasselotteri A/S.173 This includes conditions such as channeling the demand into legal, controlled games and attempting to avoid Danish gamblers demanding lotteries from suppliers operating in Denmark, including via internet.174 The last license granted to Det Danske Klasselotteri A/S adds that the advertising of the games mustn’t give the impression of being aggressive neither in form nor in content.175 On the website www.klasselotteriet.dk Det Danske Klasselotteri A/S is obliged to have visible information about being monitored by the Danish Gambling Board, including a direct link to the authority.176 Before the expiry of the license Det Danske Klasselotteri A/S must forward to the Minister of Taxation a statement explaining how the company has complied with the provisions in the license. 177

In article 4a it is stipulated that anyone who sells or facilitates participation in classlotteries which don’t have a Danish license shall be punished with a fine or prison up to 6 months. According to article 4a section 5 of the State Lottery Act, the breach can also be punished according to the Danish Criminal Code chapter 5 and 22.178 The Gaming Authority will supervise the gaming market.179

In the Lottery Prohibition Act against lotteries there is also article 5 which regards advertisements for lotteries:

“Publications in national papers of foreign lottery-plans and of advertisements regarding the, according to §§ 2-4 here in the Country, other prohibited societies and offers are punishable by fine,…The same punishment will be ordered for the one who, in another way, spread plans for foreign or non authorized national lotteries.”

Article 5 prevails other acts, but if article 5 is not applicable there is also article 10 section 1 of the Act on Certain Games, Lotteries and Betting which states that:

«(1) Any person who intentionally or grossly negligently

(1) provides games, lottery or betting in Denmark without a license pursuant to section 1 of this Act; or
(2) facilitates access to games, lotteries or betting outside the scope of a license pursuant to section 1 of this Act, shall be punishable by fine or imprisonment of up to six months.

(2) Where aggravating circumstances exist, includes especially repeat of offences or where the offence was particularly grave, the penalty pursuant to subsection (1) may increase to 12 months’ imprisonment,
(3) Any person who intentionally or grossly negligently

(1) for commercial purposes facilitates access to the licencee’s games, lotteries and betting without the licensee’s approval;
(2) offers any kind of games, lotteries, betting or competition by using the licensee’s gambling coupons, gambling results, equipment etc. without the licensee’s approval; or
(3) advertises for games, lotteries or betting outside the scope of a license issued in pursuance to section 1 of this Act shall be punishable by fine.»

The word «provides» in section 1 number 1 is to be interpreted broadly.180 The provision covers national and foreign games, lotteries and betting targeted directly at and available for Danish players. This involves that it is illegal for foreign game providers to offer gaming, which by its marketing methods, choice of language or selection of games can be said to be targeted directly at Danish players. Games offered via the internet should be considered as offered in Denmark if the offer is directed at the Danish market. This includes that the game provider’s homepage is written in Danish, has a Danish customer service or it’s in other ways clear that the gaming is directed at Danish players. The expression «“facilitates»in section 1 number 2 is to be understood as any activity intended to establish gaming or to increase the participation in illegal gambling, offered electronically or in any other way.181 One example is having a link to a homepage to a game provider without a Danish license.

The Gaming Authority has given some guidance on what is included in “advertises” in article 10 section 3 number 3.182 The following list is independent of the type of medium used and is not exhaustive:

Publicities/advertisements: All ads that are advertising unlawful gambling societies or their products.

Protest advertisements: Ads that are worded as a political message (example as a protest against the Danish gaming monopoly), if the ad is paid of and originates from an unlawful gaming society and the gaming society’s name or logo are mentioned.

Job advertisements: When the ad, in the design and exposure, undoubtfully has a marketing value – or if the ad encourages unlawful actions.

Sponsoring/Donations: If the sponsoring/donation contributes to information regarding/ reports on the unlawful game or gaming society – or in another way has some clear marketing value.

The Gaming Authority is responsible for monitoring the gaming market183 and article 10continues stating in section 5 that criminal liability pursuant to the provisions in Part 5 of theDanish Criminal Code may be imposed on companies etc (legal persons).184

The rules mentioned above may all constitute a barrier to the free movement of services and goods within the European Union. Though such barriers can be justified by certain purposes. The European Court of Justice has, in several cases, ruled that national barriers in the gaming market are justified.185

The objectives for the current system and legislation are on one hand security, i.e. consumer protection and the battle against crime and on the other hand social politics, i.e. ensuring that the profits from the gambling market are put into public’s general interests. The basic considerations underlying existing Danish gambling legislation have been unchanged for more than 250 years. Furthermore, the primary consideration of Danish gambling legislation is consumer protection, including the protection of gamblers’ legal status, and to limit excessive gambling, whereas financial considerations do not play such a prominent role.186

The Danish. High Court has treated a case regarding the motives behind the Danish legislation.

In a case from 2000 the question whether the Danish legal barriers are justified or not was treated. A Danish High Court had to take a position on whether the prohibition against advertising and selling lotteries is based on justified social matters that would mean that the restrictions don’t go against the EU-regulations. In the case the Süddeutsche Klassenlotterie wanted to sell and advertise lots to lotteries in Denmark. The Ministry of Justice refused to grant a license with reference to the law on prohibition of lotteries. Both the Ministry of Justice, the Ministry of Taxation and the Süddeutsche Klassenlotterie made references to the decisions in Schindler, Läärä and Zenatti.

The High Court found that the plaintiff had not presented evidence that would allow the court to make a judgment on the question, whether the stated public reasons (protection of players, prevention of crime, public order and the non-stimulation of demand) were in fact real motives behind the legislation. Following the case-law of the ECJ, which allows member states to exercise considerable discretionary powers if the restrictions can be said to be justified, the court ruled in favor of the Danish Government. The ruling was not appealed.

Another case is still underway in the Danish High Court. The company LadbrokesWorldwide Betting filed a complaint against the Danish Government (The Ministry ofTaxation) on the 1st of July 2004 after having been denied a license to provide betting andother fixed odds gambling services. In this area there is a state-controlled monopoly and onlyDansk Tipstjeneste A/S has a license to operate. Ladbrokes has argued that the realreason for the monopoly is a fiscal one and that therefore the legislation is not inconformity with the EC-treaty. The case is still pending in the court.

Dansk Tipstjeneste has clarified that the Danish State holds the view that “a monopoly structure is better than both a total ban and a more or less liberalized market. A complete ban has long been an outdated measure and an impossible solution if an extensive black market for games with financial stakes is to be avoided. On the other hand, the introduction of a regulated liberalized market is bound to result in increased competition and consequently increasing gaming and betting activities. One main reason why Denmark has a gaming monopoly is precisely that the lack of competition limits the market”.187

Casino Gaming

According to the Casino Act the Ministry of Justice grants the license to run a casino in Denmark.188 Currently there are six casinos in Denmark. Following that there is no monopoly on this market there are no limits as to who can run a casino,189 though a casino must be run in a “good way”.190 Article 1 stipulates that:

“(1) The Minister of Justice may grant licenses to establish and operate gambling casinos.
(2) A license may be granted for up to 10 years at a time.
(3) In determining whether a license should be granted, an important consideration should be that it must be assumed that the applicant for a license intends to operate the gambling casino in a fully responsible manner.
(4) A license may be subject to conditions”.

It appears from the explanatory note to the Gambling Casino Act191 that the Ministry ofJustice192 finds that there will only be economic basis for a few gambling casinos in Denmark.

Accordingly, the Ministry of Justice expects that only a single figures number of licenses will be granted. Currently the Ministry of Justice has issued 6 licenses to gambling casinos in Denmark.

Casino gaming involves roulette (both French and American), baccarat and black jack. The casino requires a permit from the Minister of Justice.193 The Minister of Justice can allow other kind of games, as well as limit the amount of games in a casino.194

The Ministry can also decide on different things such as the maximum and minimum stakes195 and there is an age limit at 18 years to enter a casino.196 There are several obligations that a casino must follow to be lawful, for example register information about their customers, regulations regarding the gaming money, their staff etc. It is the police that supervise the casinos.197

Machine Gambling Outside Casinos

In year 2002 a specific law for machine gambling, the Act on Gaming Machines Offering Cash Winnings, was passed and one of its principal objectives was to combat the illegal market for slot machines by channeling gambling on slot machines into legalized, controlled forms and to limit gambling addiction.198 The law states that the Gaming Authority shall supervise the market.199 Article 6 specifies the conditions for a permit:

«Placement and running of gambling machines can take place with a permit from the Gaming Authority. The permit for placement and running of gambling machines can be given to restaurant, with an alcohol permit, with up to 3 gambling machines or for placement and running of gambling machines in a gaming hall.»

The permit can be given for a maximum of 5 years200 and article 8 makes it clear that:

«Permits for placement and running of gambling machines can be given, if one can assume,that the applicant will run the activities with gambling machines in a fully warrantable or responsible way,At the decision if permission for placing and running gambling machines in a gaming hall shallbe given, importance can also be attached to the size of the gaming hall, its placement etc.»

For the interpretation of «run the activities with gambling machines in a fully warrantable or responsible way» one shall specifically pay attention to the applicant’s earlier businesses, economical relations and any earlier breaches of the law.201

One percent of the gross revenue from machine gambling is transferred in favor of the treatment of ludomania (two third) and in favor of ludomania researches (one third).202

Denmark also has in-patient treatment for problem gamblers/compulsive gamblers that are free of charge. These four centres have help-lines. The earmarked revenue from machine gambling finances the treatment.203

According to article 10 an individual can only receive a permit if he, among other things, is resident in Denmark. Though this restriction only applies if the European regulations or other international obligations do not state something else. For a company to receive a permit, it must be registered with the Danish Commerce and Companies Agency.204 Though this restriction only applies if the European regulations or other international obligations do not state something else.

Dansk Automatspil A/S, which is a wholly owned subsidiary to Dansk Tipstjeneste A/S, is one of the operators on this competitive market.

Betting

For betting the same rules apply as for lotteries.205 According to the Act on Certain Games, Lotteries and Betting article 1 the Minister of Taxation shall be authorized to issue licenses for offering lotteries against payment of tax to the state. Article 2 stipulates that the license mentioned above only shall be granted to one company. In the law (art. 3 sect. 1) it is stated that the company shall be a limited company with a share capital of at least EUR 67,046.68 (DKK 500, 000). The state shall subscribe to 80 % of the share capital, while the Danish Sports Association and the Danish Gymnastics and Sports Associations subscribe to 10 % each.

The company that has been set up according to the regulations mentioned above is the Dansk Tipstjeneste A/S.206

The profit generated, after payment of tax to the Danish State, the prizes and administrative expenses, depreciations, provisions etc. and dividend, goes to charitable causes and noprofit purposes.207

Denmark and Sweden organize cross-border horse betting. Its results from an agreementbetween the Danish and Swedish licensed companies. Each one acts in its own country.

Danish punters place their bets in Denmark and Swedish in Sweden.

There is a possibility for organizations and companies to operate local totalizator games in connection with dogs, cycle races and pigeon races.208 They have to be attached to the sport’s central organization or association. A license valid for a maximum of 3 years is granted by the Minister of Taxation.209

Denmark, Sweden, and Iceland cooperate on football pools.

Holding a totalizator game or similar without a license and facilitating participation in a foreign totalizator game is punishable by fine or prison.210

Bingo

In the Danish interpretation of the game, Bingo doesn’t differ from other lotteries encompassed by the Lottery Prohibition Act.

In the Public Notice on Lotteries it is stipulated that organizations domiciled in Denmark can receive a license to hold a lottery:211 Article 1 defines that:

(1) Lottery permit is granted by the director of the police to a, in this country domiciled organisation, institution or committee that is composed of at least three, in this country, domiciled persons.
….

(3) With a lottery, in this public notice, is understood an arrangement where the participant, against the payment of a stake, obtain a chance to win and where the winning depends on the hazard.

Article 2 specifies the conditions for a permission to be granted:

(1) A lottery permit can be given in the benefit for charity or other causes that are for the public good.
(2) Lottery permit cannot be given in the benefit for political purposes.
(3) Lottery permit cannot be given where the prize will be won due the gambler’s choice of individual numbers or indications.
(4) Lottery permit for machines or electronic terminals cannot be given.

Further on in article 5 the public notice states that at a bingo game the prizes must not be in cash, shares or similar.212 Gift vouchers can be given away as prizes, but only as long as they can’t be exchanged for money. There is an exception to this if the permission of the bingo is restricted to the police district which has given the permit.213 The police will then decide what is suitable. Sometimes an exception can be made for several police districts.214

For certain bingo games permission is not needed.215 These games are when the bingo is organized by an association where only members can participate, the individual prizes do not exceed the amount of EUR 670,536 (DKK 5,000) and that the total sum of sales does not exceed EUR 13,409.25 (DKK 100,000) etc. It is also important that the purpose of the association cannot exclusively be to organize bingo games.

Media Gambling Services

Media games have not yet been officially recognized as being gambling services and therefore there is little information available.216 At the moment these media gambling services fall under the jurisdiction of the legislation regulating gambling services. In principle the media is not allowed to provide gambling services.

However, the article 9 (3) of the Marketing Practices Act, consolidated Act No. 699 of 17 July 2000 states that:

«The publisher of a periodical may arrange draws for the distribution of winnings in connection with the solving of prize competition.»

The instructions on premiums and competitions from the Consumers’ Ombudsman state that competitions or games that could be legally held by publishers in accordance with Section 9, subsection 3 of the Danish Marketing Practices Act could, in the opinion of the Consumers’ Ombudsman, possibly be in contravention of other legislation and lead to punishment if such legislation contains a legal base for punishment.217

Sales Promotional Gambling

The article 9 (1) of the Marketing Practices Act, consolidated Act No. 699 of 17 July 2000 states218

«No attempt may be made to promoted the sale of goods or services by means of possible winnings through participation in a draw, prize competition or other form of arrangement whose outcome depends wholly or partly on chance, if such depends on a purchase»

However, the article 9 (2) sets a limit to this general principle of prohibition:

«Subsection 1 does not apply if the amount of the individual prize and the overall winnings value is within limits laid down by the Minister of Economic and Business Affairs. Such amount limits may be determined by product and recipient types.»

The regulation on the determination of authorized winnings through draws and prize competition (Bekendtgørelse nr 1152 af 16/12/1994 om fastaettelse af beløbsgraenser i konkurrencer) states that the Article 9§1 does not apply if the amount of each individual prize does not exceed DKK. 100 (EUR 13.4077) and the overall winning value does not exceed DKK. 1000 (EUR 134.077) (§1). It also states that, when draws and prize competitions are principally destined to young people under 15, the amount of each individual prize does not exceed DKK. 5 (EUR 0.670436) and the overall winning value does not exceed DKK. 50 (EUR 6.70532) (§2).

Charity Gambling

There is no specific legislation regarding charity gambling, except in the situation where a gaming hall chooses to arrange gambling with money that goes to charitable purposes. This will reduce the gaming hall’s tax (see the chapter on taxes).219

 

127 Lovbekendtgørelse 2003-12-11 nr. 1077 om visse spil, lotterier og vaeddemal, art. 6A sec. 2.
128 Informations provided by: Skatteministeriet, “Comments and corrections to the Draft Report – Study of Gambling Services in the Internal Market of the European Union”, p. 9-10.
129 Lovbekendtgørelse 2003-12-11 nr. 1077 om visse spil, lotterier og vaeddemal, art. 6.
130 Lovbekendtgørelse 2005-12-02 nr. 1146 om om afgift af gevinster ved lotterispil mv., art. 1, letter d.
131 Lovbekendtgørelse 2005-12-02 nr. 1146 om om afgift af gevinster ved lotterispil mv., art. 1, letter a.
132 Lovbekendtgørelse 2003-12-11 nr. 1077 om visse spil, lotterier og vaeddemal, art. 1A.
133 Bevillingen til Det Danske Klasselotteri A/S til at drive klasselotteri i Danmark, art. 2.
134 Lovbekendtgørelse 2002-05-27 nr. 337 om afgift af spillekasinoer.
135 Lovbekendtgørelse 2005-12-02 nr. 337 om afgift af spillekasinoer. Art. 2, sect. 2.
136 Lovbekendtgørelse 2002-07-25 nr. 631 om gevinstgivende spilleautomater, ch. 2 art. 3 sec. 3.
137 Lovbekendtgørelse 2002-07-25 nr. 631 om gevinstgivende spilleautomater, ch. 3 art. 23.
138 Lovbekendtgørelse 2002-07-25 nr. 631 om gevinstgivende spilleautometer, art. 23, sec. 3.
139 Lovbekendtgørelse 2003-12-11 nr. 1077 om visse spil, lotterier og vaeddemal, art. 1A, sec. 1.
140 Lovbekendtgørelse 2003-12-11 nr. 1077 om visse spil, lotterier og vaeddemal, art. 1A, sec. 2.
141 Lovbekendtgørelse 2003-12-11 nr. 1077 om visse spil, lotterier og vaeddemal, art. 1A, sec.3.
142 Lovbekendtgørelse 2003-12-11 nr. 1077 om visse spil, lotterier og vaeddemal, art. 3A.
143 See commentaries from the Skatteministeriet, «Comments and corrections to the Draft Report – Study of Gambling Services in the Internal Market of the European Union», p. 11.
144 Lovbekendtgørelse 2002-05-08 nr. 286 om locale totalisatorspil, art. 2A.
145 Informations provided by the Skatteministeriet, ”Comments and corrections to the Draft report – Study of Gambling Services in the Internal Market of the European Union”, p. 11, refering to Lovbekendtgørelse 2006-01-16 nr. 22 om locale totalisatorspil, art. 2B, a recent law that has otherwise not been taken into account, as long as it has been enacted after the 31.12.2005.
146 Lovbekendtgørelse 2002-05-08 nr. 286 om locale totalisatorspil, art. 5.
147 Informations provided by the Skatteministeriet, ”Comments and corrections to the Draft report – Study of Gambling Services in the Internal Market of the European Union”, p. 11.
148 Lovbekendtgørelse 1993-07-27 nr. 636 Gevinstafgiftsloven art. 1 sec. 1 p. e and art. 2 and Bekendtgørelse om afgift af gevinster ved offentlige bortlodninger m.v. and Skatteministeriet publication about the future gambling, chapter on taxes p. 4
149 Lovbekendtgørelse 2002-07-25 nr. 631 om gevinstgivende spilleautomater, ch. 3 art. 25 and art. 38.
150 Informations provided by the Skatteministeriet, ”Comments and corrections to the Draft report – Study of Gambling Services in the Internal Market of the European Union”, p. 11.
151 Cirkulære om bortlodning CIR nr 147 af 01/08/1994, art. 1 sec. 3.
152 Lov 1869-03-06 om forbud mod lotteri m m, art. 2.
153 Bekendtgørelse 2005-09-27 nr. 909 af straffeloven.
154 Lovbekendtgørelse 2003-12-11 nr 1077 om visse spil, lotterier og væddemål, art. 3 sec. 1.
155 Bevilling till Dansk Tipstjeneste A/S til at afholde visse spil, lotterier og væddemål.
156 Informations provided by the Skatteminiesteriet, op. cit., p. 12.
157 Ibid.
158 Ibid.
159 Lovbekendtgørelse 2003-12-11 nr 1077 om visse spil, lotterier og væddemål, art. 4.
160 Informations provided by the Skatteminiesteriet, op. cit., p. 13.
161 Bevilling till Dansk Tipstjeneste A/S til at afholde visse spil, lotterier og væddemål.
162 Lovbekendtgørelse 2003-12-11 nr. 1077 om visse spil, lotterier og væddemål, art. 6A sec. 1.
163 Lovbekendtgørelse 2003-12-11 nr. 1077 om visse spil, lotterier og væddemål, art. 6B-6H.
164 Information provided by Dansk Tipstjeneste after consultation of the Preliminary Draft Report.
165 Information provided by Dansk Tipstjeneste after consultation of the Preliminary Draft Report.
166 Information provided by the Skatteministeriet, op. cit., p. 12.
167 Information provided by Dansk Tipstjeneste after consultation of the Preliminary Draft Report.
168 Information provided by Dansk Tipstjeneste after consultation of the Preliminary Draft Report.
169 Lov 1869-03-06 om forbud mod lotteri m m.
170 Cirkulære om bortlodning CIR nr 147 af 01/08/1994, art. 1 sec. 1.
171 Bekendtgørelse af Lov om Det Danske Klasselotteri A/S (LBK nr 901 af 12/11/2003) and Bevilling till det Danske Klasselotteri A/S til at drive klasselotteri i Danmark.
172 Informations provided by the Skatteminiesteriet, op. cit., p. 13.
173 Ibid.
174 Ibid.
175 Ibid.
176 Ibid.
177 Ibid.
178 LBK nr 960 af 21/09/2004 Bekendtgørelse af straffeloven ch. 5 and ch. 22 art. 203 and 204.
179 Bekendtgørelse af Lov om Det Danske Klasselotteri A/S (LBK nr 901 af 12/11/2003), art. 4a sec. 6. Bekendtgørelse om kontrol og overvågning i medfør af lov om Det Danske Klasselotteri A/S og lov om visse spil, lotterier og væddemål (BEK nr 408 af 26/05/2003).
180 Explanatory notes to article 10 of the Games, Lotteries and Betting Act.
181 Explanatory notes to article 10 of the Games, Lotteries and Betting Act.
182 Information from the Department for Gambling 18 February 2004.
183 Lovbekendtgørelse 2003-12-11 nr. 1077 om visse spil, lotterier og væddemål, art. 10 sec. 6. Bekendtgørelse om kontrol og overvågning i medfør af lov om Det Danske Klasselotteri A/S og lov om visse spil, lotterier og væddemål (BEK nr 408 af 26/05/2003).
184 LBK nr 960 af 21/09/2004 Bekendtgørelse af straffeloven ch. 5 and ch. 22 art. 203 and 204.
185 See Schindler case (C-275/92), Läärä case (C-124/97) and Zenatti case (C-67/98).
186 Information provided by Dansk Tipstjeneste after consultation of the Preliminary Draft Report.
187 Information received in a letter from Dansk Tipstjeneste Group.
188 Bekendtgørelse af lov 1994-10-10 nr 861 om spillekasinoer, ch. 1 art. 1 sec. 1.
189 Karnow comment no 1 to ch. 1 art. 1 the law on casinos.
190 Bekendtgørelse af lov 1994-10-10 nr 861 om spillekasinoer, ch. 1 art. 1 sec. 3.
191 Bill L 58, brought into Parliament on 1 November 1989.
192 Information provided by the Ministry of Justice, Civil and Police Department, 19 May 2006.
193 Lovbekendtgørelse 1994-10-10 nr. 861 om spillekasionoer, ch. 1 art. 1 and ch. 2 art. 2 sec. 1.
194 Lovbekendtgørelse 1994-10-10 nr. 861 om spillekasionoer, ch. 1 art. 1 and ch. 2 art. 2 sec. 2.
195 Bekendtgørelse af lov 1994-10-10 nr 861 om spillekasinoer, ch. 2 art. 5.
196 Bekendtgørelse af lov 1994-10-10 nr 861 om spillekasinoer, ch. 3 art. 8.
197 Bekendtgørelse af lov 1994-10-10 nr 861 om spillekasinoer, ch. 6 art. 20
198 Information received from Dansk Tipstjeneste Group.
199 Lovbekendtgørelse 2002-07-25 nr. 631 om gevinstgivende spilleautomater, ch. 2 art. 3 and Cirkulære om Spilleautomatloven – sagsudlægning (CIR nr 207 af 22/12/2000).
200 Lovbekendtgørelse 2002-07-25 nr. 631 om gevinstgivende spilleautomater, ch. 2 art. 7.
201 Westlaw Danmark art. 8 sec. 1 comment no 10.
202 Lovbekendtgørelse 2002-07-25 nr. 631 om gevinstgivende spilleautomater, ch. 3 art. 26 (Consolidating regulation concerning prize winning gambling machines).
203 Informations provided by the Skatteministeriet, op.cit., p. 14. In addition a research into the extension of problem gambling in the Danish population and the grounds and causes to the addition was initiated by the Minister of Taxation in 2004. The research is the first of its kind in Denmark and is being carried out by Socialforskningsintituttet (SFI). This first of the research is based on interviews of 10,000 people (randomly selected test sample from the Danish CPRregister) conducted by phone. Te results of the first phase are expected to be published in June
2006. In the second phase problem gamblers identified in the first phase of the research are put through a profound study in order to uncover different factors and characteristics. The results of the second phase are expected to be published in March 2007.
204 Lovbekendtgørelse 2002-07-25 nr. 631 om gevinstgivende spilleautomater, ch. 2 art. 11.
205 For further information see chapter 2 Lotteries.
206 Bevilling till Dansk Tipstjeneste A/S til at afholde visse spil, lotterier og væddemål.
207 Lovbekendtgørelse 2003-12-11 nr. 1077 om visse spil, lotterier og væddemål, art. 6A sec. 1. For Dansk Tipstjeneste A/S self-regulation, see supra n°2 Lotteries.
208 Lovbekendtgørelse 2002-05-08 nr. 286 om locale totalisatorspil, art. 1A.
209 Lovbekendtgørelse 2002-05-08 nr. 286 om locale totalisatorspil, art. 1.
210 Lovbekendtgørelse 2002-05-08 nr. 286 om locale totalisatorspil, art. 8.
211 Cirkulære om bortlodning CIR nr 147 af 01/08/1994, art. 1 sec. 3.
212 Cirkulære om bortlodning CIR nr 147 af 01/08/1994, art. 5 sec. 1.
213 Cirkulære om bortlodning CIR nr 147 af 01/08/1994, art. 5 sec. 2.
214 Cirkulære om bortlodning CIR nr 147 af 01/08/1994, art. 5 sec. 3.
215 Cirkulære om bortlodning CIR nr 147 af 01/08/1994, art. 9.
216 Information received from the Danish Ministry of Taxes.
217 http://www.skm.dk/publikationer/udgivelser/1695/1704/#LEV3-2; information provided by Dansk Tipsjeneste after consultation of the Preliminary Draft Report.
218 The Marketing Practices Act of 17 July 2000 will soon be replaced by Act n°. 1389 of 21 December
2005. This new Act will come into force on 1 July 2006. Article 9 will then be article 11. The prohibition against requiring purchase of the goods or services as a condition of participation in the promotional competition will still be in force.
219 Lovbekendtgørelse 2002-07-25 nr. 631 om gevinstgivende spilleautomater, ch. 3 art. 25 and art. 38.

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