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Denmark Going Soft Around its Edges with Internet Gambling

11 May 2011 by admin

Awhile back Denmark submitted its proposal for a regulated online gambling system to the European Commission. The Commission’s approval is necessary before Denmark can move forward in setting up their online gambling infrastructure. Unfortunately there have been delays thanks to land casino operators’ opposition, and the proposal has under review for some time now. But time allows for more thought processing, and as a result Denmark is making a change to one of their key policies in their proposal. The change shows signs that Denmark is not going to be as hardcore on their infrastructure as they originally intended.

Aw, Denmark is going soft around the edges.

Their original proposal made that it was mandatory for licensed operators of any casino online that would be available to Danish citizens to have their servers based inside Denmark. The problem with this that it would require online casino operators to create duplicates of their infrastructures and purchase more servers to place inside Denmark in order to meet this requirement. That is quite a pretty penny on top of a license application and fees just to operate in Denmark.

Enter the softening of Denmark. During the wait while their proposal is under review, the Danish Gambling Authority has changed their server location requirement a bit. Now the proposal allows for “special cases” in which it would allow countries to have their servers located in another country. However, there are stipulations: 1. Part of the online casino operator’s servers must still be located inside Denmark, and 2. The DGA would have to be allowed the ability to supervise the servers located outside their country. It seems the change of heart came when DGA officials realized that if they made it mandatory for servers to be located in Denmark that they would be severely limiting their online gambling market, and ergo limiting their revenue potential.

“A little more than kin, and less than kind.” That about sums up how the Danish land casino operators and DGA look at each other. Tied together by nationality like how family is tied together, but not really enjoying the tie. At least for the moment.

The change is unlikely to make the strain with land based Danish casinos any better. Already they are upset at the 20% tax rate online casino operators would pay the government compared to the land casino tax rate of 41%. Naturally the Danish land casinos are fighting the online proposal, stating to the European Commission that the DGA is trying to subsidize the land casinos and not creating a level playing field—and the unlevel playing field is against the Commission’s principles. Hence the drawn out review process for the Danish online gambling proposal.

With the change in the proposal’s server requirements it is possible that the European Commission could see that the Danes are trying to create a more level playing field within the online gambling market of Europe. It seems Europe overall is moving forward in online gambling. The CEN recently tweaked their online gambling policies for Europe, resulting in a change in eCOGRA tweaking their policies. On the other hand, the Danish land casinos could fight even more. But at least there is a softening in the online gambling stance of Denmark, kin or not.

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