Betsson Challenges Denmark Gambling Law

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Last week Richardt Funch, Ladbrokes Nordic country manager for Denmark, spoke somewhat favorably towards the proposed gambling law, indicating that his company would apply for a license once that process opened. Other operators who have confirmed that they will apply for licenses are Bet24 and Centrebet. This week, however, a major European online gambling operator has taken a contrary stand. This operator is Betsson.

The bone of contention is the "black period" clause in the draft law. As of now the Danish proposal is under review by European Commission (EC). The time period for the EC to complete its review expires on October 11, 2010. If by then the EC does not challenge this clause it could well be deemed to have gone into effect. Under the black period clause an operator hopeful of obtaining a license for providing online gambling services will have to cease from operating in the Denmark market till the license is issued. This clause was inserted by the Danish parliament to allow a period of real monopolistic supply to the state owned monopoly Danske Spil. Today though legally only Danske Spil can offer online gambling services many Danish players wager 'illegally' at online casinos hosted from outside Denmark. The Danish government wants to eliminate this 'illegal' competition and allow Danske Spil to increase its market share before the licensed and regulated mechanism is established. Betsson AB chief executive Pontus Lindwall has gone on record stating, "Betsson opposes strongly the proposed 'black period' and we have notified the Commission that in our view such a rule is against EU law." Betsson will also not immediately apply for an online gambling license but prefer to wait till the EC takes a stand on this matter.

Lindwall has several other issues with the draft gambling law of Denmark. He says that the tax rate of 20% is extremely high. According to Lindwall unlicensed operators would continue to service customers from Denmark. It would be "technically very complex if not impossible" to stop them. Since they would not be paying any taxes, the 20% differential could kill the licensed operators. Lindwall has also objected to certain gambling products like lottery, horse race bets, bingo, scratch cards and keno being solely reserved for Danske Spil. He said, "Usually the Ministry of Finance argues about player protection, but I guess in this case they may as well admit straight out that they keep certain games local due to financial reasons, which again is against EU law."

As the October 11 deadline approaches there will be much more said about the Denmark regulatory process, and if the EC comes out with serious reservations or condemnations the entire proposed schedule could be thrown out of gear.

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