Gambling industry incumbents in the Danish market are set for a tougher tax regime in 2021 after the Danish authorities announced tax rises.
The government is set to increase the rate of taxes paid by online gaming operators, a tax rise that will come into effect at the start of 2021.
According to the plans, operators are to pay a tax rate of 28% on their gross gaming revenue, a significant increase from the existing rate of 20%. The Danish government hopes that this rise will produce a £17.1 million increase in tax revenue.
The Danish government, which is led by the Social Democratic Party on a minority basis, has been able to gather significant political support for the tax rises, with several other parties, including the Socialist People’s Party, the Social Liberal Party and the Red-Green Alliance backing the plans.
They hope that the higher tax rates will enable better funding of support programs targeting problem gambling, along with funding more effective market regulati9on.
In attempting to reassure incumbents, the government has reminded online operators that online tax will still be lower than the tax rate for land casinos and for gaming machines. Currently, casinos pay 45% in tax on their revenue, as well as an additional 30% on revenue above a certain amount. Gaming machine operators have a 41% tax on revenue.
Gaming firms in Denmark have already agreed to a fresh code of conduct, including clear guidelines on industry practices associated with advertising, as well as reducing problem gambling harm.
That code will be enforced by the Danish Online Gambling Association. Operators who own gaming machines will have their practices overseen by the Dansk Automat Brancheforening, while land-based casinos are supervised by a third body, the Dansk Kasinoforening.