Danish government raises igaming tax in 2020 budget

3 December 2019

The Danish government is to increase the tax paid by the country’s licensed igaming operators to 28% of gross gaming revenue, claiming that this will ultimately raise DKK150m (£17.1m/€20.1m/$22.3m) in new tax revenue.

The tax hike, which will become effective from 2021, will see the tax rate increased from 20% of GGR, which has been in place since the Danish regulated online gambling market opened in 2012.

For betting and gaming, the government noted that the online tax for betting and gaming was lower than that imposed on land-based casinos and gaming machines. Casinos pay a 45% GGR tax, and a further 30% on revenue above DKK4m. Gaming machines, meanwhile, are taxed at 41% of GGR, plus 30% on revenue over DKK4,000 for restaurant-based machines, and the same levy on revenue over DKK250,000 in gaming machine halls.

The hike was of its efforts to better regulate the market, as well as providing additional funding for problem gambling treatment, the government added.

It is expected to generate DKK20m in additional taxes from 2021, rising to DKK150m.

Denmark’s Social Democratic Party-led minority government, which was elected in June this year, secured backing from other left-wing parties such as the Red-Green Alliance, Socialist People’s Party and Social Liberal Party to pass the budget.

It focuses on generating additional revenue for healthcare, education and the country’s welfare system, as well as creating the DKK25bn Green Future Fund, which will invest in environmentally friendly businesses and initiatives.

The tax hike comes after operators voluntarily introduced a new code of conduct, which sets out a series of minimum standards for advertising and player protection. Introduced from 1 July this year, it was developed by the Danish Online Gaming Association (DOGA), slot machine operator body Dansk Automat Brancheforening, and casino operator group Dansk Kasinoforening and the Aarhus-based Royal Casino.

While Danish regulations have long been hailed as an example to be followed by other regulating jurisdictions, recent results show the market has begun to decline. In the third quarter of the year, for example, revenue fell marginally to DKK1.61bn, as a result of falling contributions from sports betting and land-based gaming machines.