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EGC Makes Ruling on Denmark Taxation Case

In a case that could have wide reaching implications across Europe, the EGC has ruled that Denmark is within its rights to have different tax rates for standard casinos and online casinos. This could bring a seismic shift in the way online casinos are treated, because it ensures they will have the ability to pay fewer taxes to operate in European countries.

denmark gamblingThe case was filed by a Danish casino. They were claiming that the different tax rate was creating an unfair work environment. The lower tax paid by online casinos meant that they could do business in a different manner to land casinos, who had a higher burden. At least that is what the casino argued. The EGC did not see the matter that way.

Online sites only have to pay around 20% of their gaming revenue, while some land casinos are taxed as high as 75% of their gross gaming revenue. This is a vast difference, which was highlighted by the casino company that started this lawsuit.

There was a previous ruling from the EGC where they spoke about different rates of taxation. In that ruling, they stated that there should be no different in gambling legislation based on whether a casino is located on land or online.

The reason for the EGC not being able to rule in the casino’s favor was their belief that this different tax rate had very little impact. The EGC believes that online casinos benefit from the lower taxation. They make less profits, are less established, and need more lee way in order to enter new markets. However, this lower tax rate has next to no impact on regular casinos, who are still attracting strong numbers in Denmark.

The EGC’s secretary general had this to say on the matter: “One of the reasons for this ruling is that we want online sites to succeed in Denmark (and other countries). We want these sites to operate legally and with regulations. If these sites are taxed 50% or 60%, they will not play by the rules. Remember that illegal sites are only a few clicks away. It is important that we create a market where it is favorable for both consumers and online sites to operate within government regulations.”

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