Online gambling operators in Denmark could face a 40% hike in their taxes soon. The Danish government presented the 2020 Finance Act on Monday that will increase taxes on online gambling operators from 20% to 28%.
What is the government planning?
The Danish government aims to increase its revenue by DKK150 million (approx. US$22.2 million) to its annual budget after the new rate is introduced in 2021. Though it will help the government earn more, it will chip away at the bottom lines of the gaming operators. Originally, the government planned to go for a much higher tax bracket- 41% for slots based outside casinos and 45% for casinos. It also planned to bring further taxes on operators of they passed a certain revenue threshold.
Even with the smaller hike, the operators will now face issues in promoting their products. The government may be trying to curb this expenditure via higher taxes because the TV and radio gambling advertising reached a record high this year. All licensed Danish operators adopted a new voluntary code to control excessive TV promotions of gambling products. However, the government doesn’t appear too keen on letting self-regulation handle promotions.
Government concerned with gambling
Alongside the rising rates of gambling advertising, problem gambling is also a major concern for the government. The country’s regulator Spillemyndigheden runs a ROFUS self-exclusion registry which had records of over 20k people as by the end of September. More than 2/3rd of these people opted for permanent exclusion.
The regulator recently launched a new campaign to promote its gambling helpline StopSpillet. The Danes have created a highly cited regulatory market that often works as a guiding light for other regulators around the globe. The government has moved away from the state-run monopoly to creating a more competitive market with private players. The regulators have successfully helped gamblers move away from offshore unlicensed gambling websites to locally license private operators.
It is unclear how the gambling firms will react to this rate hike and how the local punters will change their gambling habits. However, we can expect a significant reduction in gambling promotions.