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Brussels, 14 December 2010

State Aid: Commission opens in-depth investigation into Danish taxation of gambling services

The European Commission has opened, under EU state aid rules, a formal investigation to examine whether lower taxes for online casinos in comparison to traditional casinos in Denmark could procure an anticompetitive advantage for such online casinos. The opening of an in-depth investigation provides interested third parties with the possibility to submit their comments on the possible implications of the planned measure. It does not prejudge the outcome of the investigation.

Denmark is liberalising its gambling markets by granting licences for online gambling providers. Under the notification provided to the Commission in July this year, online providers of casino games and gaming machines would be subject to a flat tax of 20 % on the gross gaming revenue (GGR), compared with up to 75% for land-based casinos and gaming halls.

The Commission has doubts at this stage whether the differential treatment entails an unjustified competitive advantage for online casinos as compared to their land-based rivals. The Commission has also received two complaints alleging the planned measure violates EU state aid rules.

Through the opening of an in-depth investigation, the Commission invites interested third parties and potentially other Member States to intervene and submit their comments and observations. This will allow the Commission to gain a better understanding of the market and especially of the emerging and fast growing market of online gambling services in Denmark, but also throughout Europe and beyond.

Gaming in Denmark is primarily governed by a State monopoly. In 2009, the government decided to replace the system with a regulated, partly liberalised gaming sector. The new law should enter into force on 1 January 2011. However, as the entry into force is subject to the Commission's prior approval, the Minister of Taxation has the authority to decide from which date the new liberalisation package will apply.

The non-confidential version of the decision will be made available under the case number N 302/2010 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

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