CJEU confirms differentiated tax regime for Danish online gambling

The Court of Justice of the European Union (CJEU) has issued a ruling that confirms the differentiated Danish tax regime for online gambling in the country.

Applicants had challenged a decision by the European Commission to approve the Danish taxation model for online and offline gambling, which sets out two different taxation levels for the alternate types of gambling.

The Danish level of tax for online gaming was established after taking into account the need to channel consumers in the country towards regulated services.

However, the Court ruled that land-based applicants are not individually impacted by the tax regime.

The Court also confirmed that Member States are able to continue setting a tax level for online gambling that considers the competitive global internet market to ensure consumers are channelled to regulated services.

Maarten Haijer, secretary general of the European Gaming & Betting Association, said: “We welcome today’s decision of the Court confirming that the Commission correctly argued that online gambling requires a tax level that takes into account the competitiveness of the global online .com offer.

“With the unregulated offer just one click away on the internet, consumers will only play within the regulated environment if that offer is sufficiently attractive in terms of price and consumer experience.

“There are plenty examples of Member States where the regulated offer fails to attract consumers due to product restrictions and tax levels, resulting in those consumers being pushed outside the European regulatory umbrella, often to unregulated Asian offerings.”

Haijer added: “Having a restrictive market defeats the purpose of any regulation, namely ensuring proper consumer protection.

“An appropriate tax level is one of the key elements in creating an attractive and safe playing environment, albeit not the only one.

“It is important to emphasise that EGBA does not consider a differentiated tax regime as an objective in itself.

“But it is imperative that the tax level for online gambling is set at a level that allows for a competitive regulated market compared to the unlicensed offer from outside of the EU.”