A Danish law imposing lower taxes on online casinos than...

measure opened up the gambling market, which had been a state monopoly, the EC said. The Gaming Duties Act subjects Internet providers of casino games and gaming machines to a tax of 20 percent on gross gaming revenue (stakes minus winnings) compared with up to 75 percent for physical casinos and gambling halls, it said. In assessing the law’s legality, the EC took into account the availability of sometime illicit online offers from operators established in other countries or subject to low or no taxation, it said. A tax that made the offer of Danish online gambling operators too expensive would have made market liberalization useless, it said. The decision establishes that a lower rate of tax for Internet gambling amounts to state aid but is nevertheless compatible with EU rules, it said. The ruling ends a year of legal uncertainty, said the European Gaming and Betting Association. It confirms that to be efficient, online gambling regulations “must be competitive as the black market is only a ‘click’ away on the internet,” it said. Online operators are subject to much higher global competition than land-based companies, said EGBA Secretary General Sigrid Ligné. The latter’s business model is completely different from Internet operators because casinos in particular are essentially local monopolies in their specific geographical markets, she said. Economic studies show that the total tax collected under a higher tax rate would eventually be lower than the amount received on the basis of a tax rate such as that in the Danish law, she said.