Gaming in Denmark: overview

Act no. 119 of 22 January 2016 on gambling (Danish Gambling Act) is the primary source of legislation. Act no. 337 of 7 April 2016 on gambling duties (Danish Gambling Duties Act) also applies.

The Danish Minister of Taxation has issued a number of executive orders that regulate the different types of gambling in more detail.

Part 3 of the Danish Gambling Act sets out the available licences for the following types of gambling:

The Danish Gambling Act applies to both land-based gambling and online gambling.

General definition

A “game” is defined in the Danish Gambling Act 2016 as any activity that falls within one of the following categories:

If an activity falls within one of one of these categories it is considered a game. The provision of such activities on the Danish market is considered provision of gambling services.

Online gambling

Online gambling is defined as gambling activities between a player and a gambling operator carried out using remote communication.

Remote communication means communication that takes place without the player and the gambling gambling operator meeting physically. It may include use of the internet, telephone, television, radio, mobile telephone, videotext with a keyboard or touch screen or e-mail.

Gambling services provided in such a way that the parties meet physically in connection with the conclusion of the agreement are not considered to be provided online.

Land-based gambling

Land-based gambling is defined as gambling activities where a player physically meets a gambling operator or its distributor.

The Danish gambling market is supervised by the:

Danish Gambling Authority

The Danish Gambling Authority sits within the Danish Ministry of Taxation. It is, among others, responsible for the:

The Danish Gambling Authority has published guidelines in both Danish and English on its website (https://spillemyndigheden.dk/en). Documents published on the website include legal guidelines, technical descriptions, Q&As and newsletters.

The Danish Gambling Authority supervises compliance with:

The Danish Gambling Authority has enforcement powers in relation to matters regulated by the Danish Gambling Act.

Danish Ministry of Taxation

The Danish Customs and Tax Administration (SKAT) is a division of the Danish Ministry of Taxation. SKAT deals with inspections, the registration of licence holders and collection of gambling duties.

SKAT has enforcement powers in relation to matters concerning collection and payment of gambling duties.

The legal department of the Danish Ministry of Taxation deals with legislative issues and handles matters in relation to European regulation.

The Danish Ministry of Taxation has limited the available number of licences for the provision of land-based casinos to seven, all of which have currently been granted (see Question 5, Available licences).

Danish Consumer Ombudsman

The Danish Consumer Ombudsman supervises compliance with the Danish Marketing Practices Act. The Danish Gambling Authority and the Danish Consumer Ombudsman have established an informal co-operation regarding the regulation of gambling marketing.

See box, The regulatory authorities.

Poker

The Danish Gambling Authority identifies poker as a card game coming in many different forms, the most common being Texas hold’em, Omaha, Seven Card Stud and Five-card draw.

Land-based poker tournaments are not covered by the Danish Gambling Act 2016. They are instead regulated by Act no. 83 of 22 January 2016 on public gambling in the form of a tournament (Poker Act).

A poker tournament can be arranged if all of the following apply (Poker Act):

Betting

A licence to provide betting under Danish Gambling Act is a licence to provide both online and land-based betting. Both “regular” betting (that is, betting at odds set by the provider) and betting exchanges are allowed.

Betting is an activity in which the participants have a chance of winning a prize and where bets are placed on:

Betting on races with pigeons, horses and dogs is provided under a monopoly by the state-owned company Danske Spil A/S.

Providing betting on the result of lotteries, or on the outcome of casino games where the probability of winning in the game is solely a matter of chance (for example roulette or gaming machines offering cash winnings), is not permitted.

Specialist types of betting within the definition include:

Sports betting

Sports betting is not distinguished from general betting in Danish gambling legislation.

Casino games

Casino games include lotteries and combination games, and include games:

See below, Combination games.

Slot and other machine gaming

Danish gambling legislation specifically identifies “gaming machines offering cash winnings” as mechanical or electronic machines that may be used for games offering winnings for the player (see above, Casino games).

Terminal-based gaming

Terminal-based gaming is not specifically identified in the Danish gambling legislation.

Bingo

Bingo is not specifically identified in the Danish gambling legislation. It is a type of lottery (see below, Lottery).

Lottery

A lottery is an activity in which the participants have a chance of winning a prize and where the question of whether or not a player wins is determined at random.

In the classic definition of a lottery, the player pays a stake to the gambling operator and chooses or is given a series of numbers. The gambling operator randomly selects a further set of numbers, and comparing these numbers with the numbers held by each player determines whether or not the player wins. Each player’s potential winnings depend on the number of participants in the lottery.

The definition of a lottery in the Danish Gambling Act includes games such as:

In such games, the player cannot affect the outcome of the game by the application of skill or ability. The outcome of the game is entirely determined by chance.

Lotteries are provided under the monopoly of the state-owned company, Danske Spil A/S.

Combination games

A combination game is an activity in which a participant has a chance of winning a prize and where the probability of winning is based on a combination of skill and chance. The definition of combination games covers a number of different types of games including poker, backgammon, blackjack, rubber-bridge, whist and guessing competitions (for example, where the competition is decided by a draw or a similar element of chance, for example, a competition in television to answer one or more questions by text message and where, at the same time, the winner is drawn out from all the persons that have answered correctly).

The relative contribution of skill and chance to the outcome of a game does not determine whether it is classed as a combination game. Any game in which both skill and chance play a part will be so classified.

Available licences

Four types of land-based gambling licences are available:

Eligibility

A licence to provide and organise most land-based gambling activities can be granted to either physical or legal persons.

A number of persons cannot apply for a gambling licence (see Question 6, Prohibitions). Any company wishing to provide land-based gambling on the Danish market must be established in Denmark or in another EU or European Economic Area (EEA) country or have an appointed legal representative living in Denmark or in another EU or EEA country. The board and the directors must all meet the requirements for natural persons mentioned above.

A legal representative of a licence holder must be approved by the Danish Gambling Authority and must meet a number of requirements similar to those applicable to the board and the directors.

A licence to provide and organise gambling can only be granted to persons or companies that are not residents of or established in Denmark or another EU or EEA country if the applicant has appointed an approved representative under section 30 of the Danish Gambling Act 2016. The representative can be a physical or a legal person. The role of the representative is to represent the licence holder in all matters. This means that the representative must be legally authorised to represent the licence holder in relation to the authorities and in civil as well as criminal legal proceedings. The representative must fulfil the same requirements as those that apply to all gambling operators established in Denmark or another EU or EEA country (see Question 6, Prohibitions).

A licence to provide local pool betting on track cycling, dog racing and pigeon racing can only be granted to companies that organise those activities and which are members of the relevant sport’s central organisation or association. A licence to provide local pool betting on horse racing can only be issued to associations. The associations which currently hold such licences have done so for a number of years.

Application procedure

Any person or company wishing to apply for a land-based gambling licence in Denmark must submit an application form. An application to provide gaming machines must be accompanied by a form filled out by the managers and personnel of the business.

The application form requires the applicant to provide legal and financial information. The applicant must also designate a number of key persons to be responsible for various areas.

It normally takes three to six months for a licence to be issued from the date the application is received by the Danish Gambling Authority.

Duration of licence and cost

The application fee and annual fees as well as the duration of a licence vary depending on the type of licence. Application fees and fees for the renewal of licences are subject to annual indexation and therefore change each year. Fees are usually a function of the gambling operator’s gross gambling revenue (GGR), which is defined as received stakes minus paid out winnings.

The following fees apply from 1 July 2016:

Prohibitions

The following classes of person cannot apply for a gambling licence:

Restrictions

The limitations and requirements for land-based gambling operators are described in detail in the executive orders relating to the Danish Gambling Act 2016.

Land-based betting is less regulated than online betting:

However, when providing betting from a physical shop, the provider must communicate clearly to customers that:

Certain requirements are also imposed on managers of such shops.

The executive order on gaming machines in gaming arcades and restaurants sets out detailed requirements for the technical performance of gaming machines. Operators of gaming machines must comply with regulations regarding, for example, the premises and the staff at the gaming venues.

The Poker Act 2016 contains regulations on the persons or companies providing poker tournaments and restrictions on the number of tournaments that may be held. Permission to provide a poker tournament cannot be used for online poker.

The operation of land-based casinos is regulated in the executive order on land-based casinos. Operators of land-based casinos must comply with requests from players to be self-excluded (banned). If a player requests to be self-excluded, the operator must, among other things:

Once a person is registered on ROFUS, all land-based casinos must deny that person access. A player’s self-exclusion lasts for one year (a “cooling off period”). After this period, the player can request to have the registration of their self-exclusion deleted. The registration should automatically be deleted after a period of five years.

All land-based casino operators must take the necessary measures to avoid sending marketing material to persons who have self-excluded themselves.

Anti-money laundering legislation

The management and staff of the land-based casino operator must be especially attentive towards player activities which may be connected to money laundering or financing of terrorism. This duty is particularly relevant in relation to unusually large transactions as well as to certain transactional patterns.

If the operator of a land-based casino suspects that a transaction is connected to money laundering or financing of terrorism, and if the suspicion cannot be disproved following an inspection, the casino must notify the Danish State Prosecutor for Serious Economic and International Crime.

The land-based casino must have written internal rules concerning the prevention of money laundering and terrorism.

As at 1 October 2016, Directive 2015/849/EU on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (Fourth EU Anti-Money Laundering Directive) has yet to be implemented in Denmark. It is expected that it will impose changes to the current regulation.

There are currently no issues as to the legality of the Danish gambling legislation at EU level.

Available licences

Three types of online gambling licence are available:

Combined licences covering both betting (online and land-based) and online casinos are available.

A licence to provide betting or online casinos grants the right to provide gambling services on the Danish market. The licence does not automatically cover the provision of gambling in Greenland, although a licence can be issued to cover Greenland at no extra cost. If the licence is to cover Greenland, the licence holder must ensure that specific information is available to players in Greenlandic.

Eligibility

See Question 5, Eligibility.

Application procedure

Any individual or company wishing to apply for an online gambling licence in Denmark must submit three different forms:

These three forms must be accompanied by additional documentation supporting and elaborating the information provided in the application form.

It normally takes three to six months for the Danish Gambling Authority to issue a licence from the date it receives an application.

Duration of licence and cost

Online gambling licences normally last for five years. At the expiration of this period the licence holder can renew its gambling licence. The licence renewal process is similar to the application process and involves handing in many of the same documents and information.

Application fees and fees for the renewal of licences are subject to annual indexation and therefore change each year. The following fees apply from 1 July 2016:

Prohibitions

The same prohibitions as for land-based gambling apply (see Question 6, Prohibitions).

Restrictions

Operators must provide online gambling in a sound financial and professional manner. The Danish Gambling Authority will assess whether this is the case based on a large number of documents that must be submitted by the applicant for a licence. The Danish Gambling Authority will consider the overall picture and if it finds that the necessary requirements are met, will issue either a conditional or unconditional licence.

The Danish Gambling Authority has published a Guideline on betting and online casino, listing 11 duties related to gambling:

Operators must demonstrate their ability to perform each of these sufficiently.

The licence holder can outsource the completion of some of these duties to third parties. However, duty 1 and duty 3 must always be performed by the licence holder.

Operators of online betting and online casinos must make available to players a function allowing them to request a 24 hour “cool off period” in which the player cannot use the site, a temporary exclusion or a final exclusion from gambling (see Question 6, Restrictions). Where a player requests to be self-excluded, the gambling operator must also give the player information on the opportunities to get counselling and treatment for gambling addiction in a Danish treatment facility.

The online gambling operator must be technically connected to the Danish Gambling Authority’s register of players who have voluntarily self-excluded themselves from gambling (ROFUS) and must ensure that players who have self-excluded themselves via ROFUS are denied access to participate in gambling services.

All online gambling operators must avoid sending marketing material to persons who have self-excluded themselves.

Anti-money laundering legislation

The executive orders on online betting and online casinos contain rules with regard to anti-money laundering that are similar to the rules in the executive order on land-based casinos, setting out requirements for attention, inspection, and notification, and that written internal rules be made concerning the prevention of money laundering and terrorism (for more details, see Question 6, Anti-money laundering legislation).

As at 1 October 2016, the Fourth EU Anti-Money Laundering Directive has yet to be implemented in Denmark. It is expected that it will impose changes to the current regulation.

Online gambling operators contracting with players directly, either through their own website or through a white label site, must hold an online gambling licence to provide gambling in Denmark. In general, a “white label” site is defined as a site, which markets games that is provided under a different party’s licence to provide gambling, making it appear as if the white label site operates the game. This will allow the producer/product owner to sell its gambling product several times in a way that makes it look like a unique brand every time. The producer/product owner must be a licence holder. There are specific regulations on the use of white label sites.

Online providers who do not contract directly with players, but only provide services to gambling operators, are not required to hold a licence.

The Danish Gambling Authority may require internet providers to block access to illegal gambling operators’ websites once an injunction has been issued by a Danish Bailiff’s Court.

The Danish Gambling Authority may also require banks to block financial transactions from or to an illegal gambling operator once an injunction has been issued by a Danish Bailiff’s Court. However, as at 1 October 2016, the Danish banks and the Danish payment service providers do not have the technical means necessary to block financial transactions.

The law is in general the same in relation to mobile gambling and interactive gambling in Denmark. However, one major difference exists regarding how the player logs on to the gambling account when using a mobile device.

The main rule is that a player’s login to their online gambling account must involve the use of a digital signature with a security level corresponding to the Public Certificates for Electronic Services (Offentlige Certifikater til Elektronisk Service) (OCES) standard or higher. To fulfil this requirement, the Danish licensees use NemID (the solution used by most government/private banks in Denmark) as the method to log in.

However, prior to 2015, DanID, the supplier of the NemID solution, had not developed a solution for NemID which worked on all technical platforms including mobile units (tablets, smartphones and so on). For this reason, an exemption to the main rule was made, by which most licensees were granted a permission not to use NemID.

In September 2014, the Danish Gambling Authority announced that DanID had developed a new JavaScript solution for NemID, which worked on most mobile units. They said that the existing permissions not to use NemID would expire on 1 January 2015. However, an amendment to the relevant legislation that came into force on 1 January 2015 had the effect that permissions to operate without using NemID on technical platforms that had been previously granted would in fact remain in force.

Social gaming is often described as games consisting of structured activities which have contextual rules through which users can engage with one another. Social games are most often multiplayer and have one or more of the following features:

Social games that are provided for free (that is, where no stake or payment is needed to participate) can be provided without a licence.

The Danish Gambling Act 2016 is silent on the subject of when and if virtual currency can be given monetary value. This question must be decided on a case-by-case basis.

However, it is clear that if virtual currency is used as a credit with which to participate in a game, but is of no monetary or other value, this currency would under the Danish Gambling Act not constitute a prize or a stake.

In general, social gaming is an emerging area, to which the Danish Gambling Authority is paying close attention.Gambling debts

It is necessary to differentiate between legal gambling and illegal gambling.

Debts incurred in legal gambling are in theory enforceable. However, as the provision of gambling using a credit facility is prohibited, no debts should arise from gambling.

Participants must deposit the amount of money they intend to play for before being able to play.

Debts incurred in illegal gambling are generally not enforceable, as they will most likely be considered contrary to the general Danish principle of law and decency.

The provision and organising of games regulated by the Danish Gambling Act 2016 is subject to duties pursuant to the Danish Gambling Duties Act 2016. The duty percentage and the frequency of payment vary depending on the type of game.

Usually, the amount of the duty is a function of the gross gambling revenue (GGR), which is defined as received stakes minus paid out winnings.

Land-based gambling

The operator of a land-based casino must pay a duty at 45% of the GGR, minus the value of tipping chips (that is, the value of the tips stored in the so-called troncs), plus an additional 30% on the part of the GGR that exceeds DKK4 million. The duty is due on a monthly basis.

As a rule, operators of gaming machines offering cash winnings in restaurants or gaming arcades must:

The operator of a free game (that is, a game without stakes) must pay a duty at 17.5% of that part of the winnings in excess of DKK200. The duty is due 15 days after the result has been decided.

Online gambling

Operators of betting (both land-based betting and online betting), including betting exchanges, must pay a duty at 20% of the GGR. The duty is due on a monthly basis.

The operator of an online casino must pay a duty at 20% of the GGR. For poker, and other games on which the operator charges a commission, the duty is 20% of the amount charged in commission. The duty is due on a monthly basis.

In addition to the generally applicable Danish marketing legislation, the Danish Gambling Act 2016 contains a number of specific rules relating to the marketing of gambling:

The marketing of bonuses (for example, a sign-up bonus) is regulated by the executive orders on the provision of both land-based and online betting and on the provision of online casinos. When marketing a bonus, the gambling operator must make sure that:

Land-based gambling

The legal status of land-based gambling has not changed significantly in recent years.

Online gambling

Since the part liberalisation of the Danish gambling market in 2012, the legal status of online gambling has been largely unchanged.

In December 2015, the Danish Gambling Authority published a newsletter stating that they now accept the provision “virtual stock trading games”. This is defined as a game where customers play with fictional money on fictional financial markets. Equivalently, other products allowing players to bet on the future value of financial instruments can be offered as long as they do not constitute financial instruments and they comply with certain requirements. Financial instruments, such as financial spread betting, contracts of difference (CFD) and the like, are not covered by the term virtual stock trading games, and therefore do not fall within the scope of the Danish Gambling Act.

As at 1 October 2016, there are no proposals for reform of Danish gambling legislation.