The European Commission has ruled that member states are entitled to apply lower tax rates to online compared to land-based gambling activities under EU state aid rules.
Complaints made last year by the Danish Slot Machine Association and by one of the country’s land-based casinos claimed that, with the opening of the online gaming market, the lower tax rate set for online casino operators was illegal state aid. This forced the Danish government to put its new Gaming Act on hold.
The Commission has now moved to end this uncertainty, stating that creating lower taxes for online casinos is "in line" with state aid rules.
"This is because the positive effects of the liberalisation of the sector outweigh potential distortions of competition," it said.
Making the offer of Danish online providers too expensive would have "rendered the liberalisation of the market devoid of purpose."
The announcement has been welcomed by the European Gaming and Betting Association.
"Online operators are subject to a much higher global competitive pressure than land-based providers," said EGBA secretary general Sigrid Ligne. "The business model of land-based operators is completely different as casinos in particular operate quasi-local monopolies in their specific geographical market."
