Eternity Law International — Offline gambling — Gambling license in Denmark

Gambling license in Denmark

Published:
April 1, 2019

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Gambling license in Denmark for sale

Despite the general liberalization of Danish legislation, the position of the gambling business is rather ambiguous, since the registration of a gambling business in Denmark has a serious background. But, as you know, the general liberal agenda does not include direct regulation of the service market by the relevant government agencies.

For this reason, the issue of organizing a gambling business in Denmark requires a detailed analysis.

General information about Denmark

Despite the fact that by the standards of Europe, Denmark is a relatively small country (the total area is 43 thousand km2, the population is about 6 million), in terms of economic and social development. It shows excellent results, which confirms the 4th place in the world, according to the human development index …

This includes a high standard of living (the average salary is 30% more than the EU average), as well as a wide range of activities outside of working hours. This is possible thanks to the 37.5 hour workweek.

Denmark is one of the happiest countries in the world according to special research conducted in 2016. Also in 2015, an economic development organization acknowledged that Denmark has the least pronounced gap between the two extremes of human well-being.

History of legalization of gambling business in Denmark

The history of illegal gambling in Denmark is quite long. It was easier for the state in the post-war period to monopolize all possible types of gambling, and not to fight them. In 1948, the Danske Spil company was created for this. This brand exists to this day.

Despite the fact that the presence of slot machines was allowed in the establishments, the game was played only for conventional monetary units.

Subsequently, at the turn of the 70s and 80s of the twentieth century, there was a large number of underground gambling establishments, into which only a trusted person could get. Such establishments were usually located in bars.

An interesting fact is that in underground gambling establishments the game was played for matches or pieces of paper, which were subsequently exchanged for cash, according to specially compiled payout tables.

After the legislation on gambling took another step towards liberalization in 1990, the demand for underground establishments began to fall.

Amendments to the current legislation provided opportunities for the admission of casino operators from a number of European countries (Germany, Austria, the Netherlands). However, activities in Denmark required obtaining a license and meeting very stringent requirements.

One of the provisions that included the requirements was the creation of a joint venture by a foreign agent with a resident from Denmark. This led to the placement of gambling establishments in hotels, which acted as partners.

With the development of the Internet, a large number of online casinos with full tools in the form of games and bets began to appear. As this business sector began to grow rapidly, the government faced a need for legislative regulation of this segment.

One of the first steps was the ban on the activities of foreign companies in territories controlled by Danish jurisdiction in 2003. Online casino operators quite often registered in countries with a more free market in terms of government control.

Therefore, Danish banks were obliged to refuse to service credit cards that were used to pay for services in online gambling establishments.

The appearance of such initiatives in Danish legislation has caused a negative reaction from the European Union. The inconsistency between local requirements and European institutions has intensified since Denmark ratified the treaty on the functioning of the European Union in 2008.

To restore the status quo in 2010, changes were made to the existing legislation on the gambling business, which began to spread in 2012.

One of the initiatives was the legal removal of Danske Spil’s gambling monopolization and the de facto admission of foreign agents to the local market. The state retained the right to the state lottery, bingo game, lottery scratch cards, bets on horse, dog and pigeon races.

Private companies have acquired the right to engage in such gambling activities as slots, betting and online casinos.

However, in 2014, several amendments were adopted that significantly tightened the law in relation to operators from other countries. First of all, both operators and distributors of casino software under the new amendments were obliged to be tested and licensed in Denmark.

The owners of online casinos from abroad were obliged to pay tax in the form of 20% of income to the Danish budget.

History of legalization of gambling business in Denmark

The history of illegal gambling in Denmark is quite long. It was easier for the state in the post-war period to monopolize all possible types of gambling, and not to fight them. In 1948, the Danske Spil company was created for this. This brand exists to this day.

Despite the fact that the presence of slot machines was allowed in the establishments, the game was played only for conventional monetary units.

Subsequently, at the turn of the 70s and 80s of the twentieth century, there was a large number of underground gambling establishments, into which only a trusted person could get. Such establishments were usually located in bars.

An interesting fact is that in underground gambling establishments the game was played for matches or pieces of paper, which were subsequently exchanged for cash, according to specially compiled payout tables.

After the legislation on gambling took another step towards liberalization in 1990, the demand for underground establishments began to fall.

Amendments to the current legislation provided opportunities for the admission of casino operators from a number of European countries (Germany, Austria, the Netherlands). However, activities in Denmark required obtaining a license and meeting very stringent requirements.

One of the provisions that included the requirements was the creation of a joint venture by a foreign agent with a resident from Denmark. This led to the placement of gambling establishments in hotels, which acted as partners.

With the development of the Internet, a large number of online casinos with full tools in the form of games and bets began to appear. As this business sector began to grow rapidly, the government faced a need for legislative regulation of this segment.

One of the first steps was the ban on the activities of foreign companies in territories controlled by Danish jurisdiction in 2003. Online casino operators quite often registered in countries with a more free market in terms of government control.

Therefore, Danish banks were obliged to refuse to service credit cards that were used to pay for services in online gambling establishments.

The appearance of such initiatives in Danish legislation has caused a negative reaction from the European Union. The inconsistency between local requirements and European institutions has intensified since Denmark ratified the treaty on the functioning of the European Union in 2008.

To restore the status quo in 2010, changes were made to the existing legislation on the gambling business, which began to spread in 2012.

One of the initiatives was the legal removal of Danske Spil’s gambling monopolization and the admission of foreign agents to the local market. The state retained the right to the state lottery, bingo game, lottery scratch cards, bets on horse, dog and pigeon races.

Private companies have acquired the right to engage in such gambling activities as slots, betting and online casinos.

However, in 2014, several amendments were adopted that significantly tightened the law in relation to operators from other countries. First of all, both operators and distributors of casino software under the new amendments were obliged to be tested and licensed in Denmark.

The owners of online casinos from abroad were obliged to pay tax in the form of 20% of income to the Danish budget.

Legal aspects of running a gambling business in Denmark

Gaming activities of a commercial direction will not be legal without obtaining official permission from the appropriate authority. The Ministry of Justice is in charge of licensing gambling establishments.

The notion of gambling debt in public etiquette is equated to a “debt of honor”, due to the fact that the legal payment of gambling debts is not provided from the aspect of participation in unlicensed games.

According to legislative regulations, since 2012, a specialized Office for Gambling has been providing licenses for individuals and legal entities who have expressed a desire to conduct commercial activities in the market for gaming services. The terms for licensing are as follows:

  • providing a detailed justification for conducting commercial activities in this area from the benefit aspect;
  • the applicant has no criminal record and has reached the age of 21;
  • confirmation of the purity of the company’s business reputation;
  • payment of the fee, which is $ 37,000 for online casinos and betting companies, and the fee for both types of commercial enterprises will be $ 52,000, and the amount can be paid in local currency;
  • the license fee itself can range from $ 7,400 to $ 220,000.

The criminal liability for organizing gaming activities in a public place is a fine or one year in prison.

Criminal liability for providing premises for unlicensed gambling is a fine or imprisonment for up to six months, and direct participation in gambling is punishable by fines.

Types of gambling that are subject to licensing

According to 2013 data, the following categories are the most popular and profitable types of gambling activity:

  • lotteries – $ 457 million;
  • slot machines – $ 240 million;
  • rates – $ 205 million;
  • online casino – $ 146 million;
  • conventional casinos – $ 49.4 million;
  • horse racing – $ 19.9 million.

The total amount of profit from those types of gambling business, whose activities are regulated by the state at the legislative level, is $ 1.12 billion as of 2013.

Among other types of gaming activities, poker stands out. According to Danish law, sports poker cannot be classified as gambling, and accordingly, the organization does not require a license.

Poker, especially in the form of an online game, has been popular in Denmark for quite a long time. This popularity is attributed to the success of Copenhagen-born Gustav Hansen, a professional poker player. The sum of prize money collected by him over 10 years of playing is almost $ 10 million.

The popularity of poker in Denmark also contributes to the fact that this small country is consistently ranked 25th in the global WSOP rankings. Unfortunately, the data on the annual profit for the organization of poker is not known.

Organization of lotteries

Originally, the Danske Spil organization, when it was founded in 1948, was called Dansk Tipstjeneste. The organization was founded by the Danish government, the Olympic Committee and the Sports Federation, with about 80% of the sponsorship amount provided by the government.

On the basis of this organization, two companies were created in 2012. The first one, Danske Lotteri Spil, covers the lottery segment (Lotto, Keno, Eurojackpot), Bingo lotto, accepts bets on Dantoto equestrian sports and organizes Quick scratch cards. The second, Danske Licens Spil, deals with bookmaking and online gambling.

There is also another state lottery called Klasseloteriet. Before the active development of the Internet, tickets were distributed through a certified dealer network. The slogan, which has been unchanged for many years, reads “Denmark’s Millions Lottery”.

It performs two functions at once – to emphasize the size of the potential winnings and the massive participation in the lottery. Each ticket contains a unique numerical combination, and the price of each lottery ticket directly depends on the potential winnings.

The slot machine industry in Denmark

If we take the 2012 data as a sample, that is, even before the amendments to the legislation, the data for Denmark as a whole looks as follows:

  • classic slot machines – 26 thousand;
  • arcade slot machines – 3.3 thousand.

Average annual income from the use of slot machines in 2012 was about $ 266 million. This figure looks quite impressive when compared with the annual income from online games and betting in general, which figure in the same year was $ 296 million. There is often a special area for slot machines in a casino.

Betting

Most often in the gambling industry, bets are accepted on various sports events. The most popular events are football competitions that are broadcast on Danish television, namely the English Premier League and the National Football League.

Thanks to the success in golf of Thomas Bjorn, a native of Silkeborg, the sport is also perceived with interest by the Danes and bets are accepted on it. Sports such as handball and badminton are also popular among bookmakers. In recent years, there has also been an increase in the number of bets on bicycle racing.

In many ways, such an increase in popularity for this type of sports competition is associated with Denmark’s proposal to host the first stage of the Tour de France on its territory.

A smaller, but no less significant segment in the betting industry is occupied by financial and political events – an integral part of the betting industry.

Operators TopBetta, Fanaments and Star Fantasy League have a clear focus on fantasy sports betting, but other operators, such as Bet365, also have positions related to this specificity in their sportsbook list.

By the way, Bet365 and BetEnt are affiliated representations of world-class bookmakers, but the leader among operators is Danske Licens Spil.

Online casino

Before Danish online casino legislation was amended in 2010, there were about 400 online casinos available to citizens in the kingdom. Many of them were created in active collaboration with Danish residents.

Due to the fact that the new legislation provided for licensing, a large number of operators decided to legalize their commercial activities. During the first year of the new law, only 25 licenses were issued by the Danish Gambling Authority.

Companies such as 888, Ladbrokes and Bwin were among the first to legalize their sites. At the same time, about 57 sites were blacklisted as unlicensed.

There are currently about 210 online casinos in Denmark. The overwhelming majority of them have two languages in the interface – Danish and English. Among the accepted currencies they use dollars, euros and Danish kronor. Sites such as Dansk777 Casino, Casino Cruise and Bet365 have the tools to match the casino.

Sites such as All Slots Mobile, 32Red Mobile and Golden Riviera specialize in mobile gambling content. Services such as Zezam, Spillenjørnet, Live Casino and Casino are officially supported by Danske Licens Spil.

Land-based casinos

It is these casinos that have influenced Danske Spil to shatter the unshakable state monopoly. Currently, stationary casinos operate in Copenhagen, Aalborg, Helsingor, Aarhus, Vejle and Odense.

In addition, there is also the Pearl Seaways ferry between Oslo and Copenhagen, which is also represented by a gambling establishment. Copenhagen casino confidently ranks first among the largest gambling establishments in Northern Europe. The types of gambling in land-based casinos are represented by slots, poker, blackjack, roulette, baccarat and punto banco.

The regulation of this type of casino is as follows:

  • the minimum entrance fee should be about $ 14;
  • the casino must work no more than 14 hours a day;
  • customers must have membership cards;
  • participation of minors in games is not allowed;
  • customer identification.

There is also a set of rules controlled by the police regarding the use of recording techniques and the appearance of clients. The Danish Gambling Authority regularly conducts inspections of gambling establishments.

Horseback Riding

Horse racing is a fairly developed sport in Denmark. There are a total of 9 racetracks, the largest of which are located in Klumpenborg, Bornholm and Billund. You can place bets on the races both in advance and in the in-play mode. The official operator of equestrian sports betting is the state-owned company Danske Lotteti Spil.

State influence on the gambling services market

Despite the fact that the state monopoly on gambling was officially abolished in 2010, many of the mechanisms of control and regulatory functions are still concentrated in the hands of the state:

  1. Obtaining licenses for gambling business. Both private and public companies are required to obtain a license. In addition, even the main state operator Danske Spil is required to be licensed annually, while the list of games for institutions to obtain a license is strictly regulated.
  2. Regulation of advertising campaigns. The operator has the right to advertise its products only after obtaining a license, and must do so without resorting to services provided by third parties. Celebrities must not be involved in advertising campaigns, and they must provide information in such a way that a potential consumer can soberly assess their chances of winning.
  3. Control over financial activities. During licensing, primary controls are carried out, but additional checks can be carried out at any time. In Denmark taxes on gambling business are quite high. For operators, there are as many as two types of tax – on profit (45% from the first 4 million Danish kroner, then 75% is paid, for online establishments – 20%) and corporate, which is 25% of the remaining amount.
  4. Distribution of funds received as a result of state licensing and taxation. Funds are often directed to sports and cultural programs.

Even if we take into account the abolition of the state monopoly on all types of gambling business, a detailed study of statistics shows that organizations controlled by state bodies still have a greater sphere of influence in the gambling services market in comparison with private companies.

The segment of the market directly or indirectly controlled by the state is 62%.

Voluntarily excluded players roster

To improve efficiency in the fight against gambling addiction, the Danish Gambling Authority has created ROFUS – a special register of players who were voluntarily excluded. This register is intended to protect Danish citizens from gambling, and registration is carried out on a voluntary basis.

Once a citizen is registered, he cannot participate in both betting and online games that have been licensed. There are two forms – permanent exemption and temporary.

A temporary exclusion gives the participant the opportunity to independently choose the period during which he will not be able to play, while after this period the opportunity will resume automatically.

The exclusion on a permanent basis has a minimum period of one year. Upon the expiration of this period, a petition for deletion from the register may be submitted to the appropriate authority.

Prospects for the gambling business in Denmark

As of 2016, the amount of profit from all types of gambling, regulated by the state, is about $ 1.33 billion. If we calculate this amount in relation to the entire population of Denmark over 18 years old, it will amount to $ 295 or 2000 Danish crowns.

After the liberalization of legislation after 2010, the gaming services market shows a rather slow, but constant growth. If in the future the legislation does not undergo changes, then such trends will continue.

However, it is worth knowing that the latest changes in legislation dating back to 2014 caused outrage on the part of the state’s European partners, so the chance of new amendments to legislative acts is still possible, which is not a secret for all owners of gambling establishments.

For assistance with registration, please contact Eternity Law International.

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