Denmark Hikes Up Online Gambling Operators’ Tax by 40%

  • Tax for online gambling providers will increase from 20% to 28%
  • Land-based operators incur much higher taxation at 41-45%
  • Additional revenue from revised rates to go towards health, education, welfare initiatives
flag of Denmark with Copenhagen scene in the background
Denmark’s government recently announced it will be upping online gambling operators’ taxes from 20% to 28% in 2021. [Image: Shutterstock.com]

Rate increased from 20% to 28%

As part of Denmark’s new 2020 Finance Act, the government has announced a plan to hike online gambling tax rates from 20% to 28%.

It is hoped this will account for another DKK150m (US$22.2m) intended to boost the Danish government’s annual budget. The Act suggests that the gambling tax increase won’t be introduced until 2021. 

Land-based operators’ contributions much higher

The 8% increase is effectively equivalent to a 40% hike in tax obligations for gambling operators who currently hold a license. Denmark’s government has stressed the fact that land-based gambling operators currently incur much higher tax rates than online ones.

8% increase is effectively equivalent to a 40% hike in tax obligations

Casinos pay 45% tax, while a 41% rate is in place for slot machines placed outside casinos. There are also top-up taxes imposed on operators whose revenues hit certain benchmarks. A 30% surplus exists on restaurant-based machines generating over DKK4,000 ($595). The same rate must be paid on gaming machine hall earnings over DKK250,000 ($37,166).

New revenue will go towards various initiatives

The Danish government has said the new revenue generated from changes in gambling taxation will fund various initiatives in healthcare, education, and the welfare system. A significant portion is earmarked for the DKK25bn ($3.71bn) Green Fund, which is aimed at investing in environmentally friendly businesses.

gambling taxation will fund various initiatives in healthcare, education, and the welfare system

The increase, while large, probably isn’t surprising for operators. Advertising for gambling-based products in the country has hit a record high on both TV and radio in 2019. Danish license holders have also voted to adopt a new voluntary code that will curb any excessive marketing attempts.

Government supports national gambling support measures

The Danish government is also said to be concerned with the effects of problem gambling in the country. It has supported the Spillemyndigheden, the national regulatory agency, and its increasingly popular self-exclusion registry, ROFUS.

By the end of September, the registry already held 20,000 names, with two-thirds of those listed asking for permanent exclusion.

The Danish Gambling Authority has also announced a new gambling phone line initiative alongside its existing live chat facility.

The latest forecast for Q3 in 2019 saw gambling revenue in Denmark fall slightly by 1%. It generated a total of DKK1.61bn ($24m), compared with DKK1.63bn ($24m) in Q3 of 2018.