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Like other Scandinavian countries, all gambling in Denmark used to be controlled by the government maintaining a monopoly on it, which is still the case in Norway, Sweden, and Finland.
Denmark’s gaming authority, Danske Spil, has been running gambling in Denmark since as far back as 1948, and still do run the lottery and horse and dog racing, but Danish authorities have recently rethought this and now provide outside gaming companies with licensure in their new regulatory scheme. (1)
So the new law came into effect in 2012 and now the Danish Gambling Authority issues licenses for not only poker but for casino and sports betting as well. This has also allowed an expansion of land based gaming which has become much more widely available in Denmark as a result of these new regulations.
Danish authorities were wise enough to realize that online gaming was taking place and will continue to take place with our without their approval, and the only real consequence of their failure to act here was less control over gaming along with an inability to cash in on the market through the levying of taxation. (2)
Also, as a member of the European Union, Danish players could play legally on EU licensed online poker sites so it wasn’t even a matter of their being able to outlaw this, even if that was something that could be achieved practically. There was also pressure by the EU for them to get rid of their gambling monopoly, and unlike Sweden and Finland who face a similar circumstance, they made the decision to comply sooner rather than later, although it’s likely both of these other countries will have to do so as well in the near future.
Now that Denmark actually has regulated and licensed online gambling themselves, they may now require residents to participate and that certainly was an issue that factored into things. This is something the other countries need to take note of as well.
While land based gambling in Denmark comprises a larger amount of betting than online gambling, online gambling comes pretty close, where we generally see a big gap here, and this is testimony to how well thought out the new online regulations are, and this actually has served as a model to other countries on how to do it right. (3)
Denmark’s Approach To Online Poker and Online Gambling Regulation
Denmark’s actually a pretty small country as far as countries go, with a total population of less than 6 million, and in terms of what’s considered a good player base, it would fall well short of what is really needed to thrive.
Italy and France, who kicked off the online gambling regulation movement in Europe, are both over 10 times bigger in population, and many feel that neither country is large enough to allow for an online poker market that is anywhere near optimal. The biggest complaint among players in these countries is the lack of a sufficient player base, and this is the biggest reason why almost half of the online players in these countries still maintain accounts at unlicensed poker rooms outside the country.
So where Denmark is concerned, ring fencing the market like countries like Italy, Spain, and France have done simply would be a terrible idea. Ring fencing, which limits play on available poker sites to players from that country only, does allow for a simpler solution and does provide the regulators with more control over the process as the sites are all country specific, but it also limits the player base to those residing within the country, and player base size is a huge deal where the desirability of poker rooms go.
So Denmark wisely chose not to do so and devised a scheme where they could manage their own players and receive the tax revenue that is due to them while still allowing players the ability to play at a poker room’s main site and play against players from other countries as well.
What does this mean? Well, simply put, poker is very much legal in Denmark! Check out 888 Poker to get the best bonuses for ANY gambling site in your country – or click the banner below:
A Model In Regulatory Design
So this has served as a model and one that is seen as well preferable to the one that was already in place, and its success has resulted in the U.K. modeling their regulatory scheme to a large degree on what Denmark is doing, particularly in looking to steer well clear of the ring fencing mentality that has run into so many problems in other European countries.
Denmark also has a more reasonable tax structure than seen in some other countries, settling on a 20% tax rate on gross gaming revenues. This is particularly important when it comes to online poker as if you tax it too much then this can result in too big of an impact on rake, where hardly anyone makes any money from it.
Online poker is driven to a large degree by high volume players and if these players can’t make money anymore they will just play elsewhere, outside the regulatory scheme of course. This is one of the big knocks against France’s scheme for instance.
So the two biggest fears and criticisms of regulated online poker, the limiting of player bases and excessive taxation, have both been addressed rather beautifully by the Danish scheme.
So although Danish authorities do seek to block their residents’ access to unlicensed rooms, there’s hardly a need to.
Denmark’s online gambling regulation sits as the envy of the world, in spite of the small size of their market, and they are widely considered to have the best scheme of any country who has tried this thus far. Compliance is high, as is player satisfaction, revenues are impressive and growing, and even Danske Spil, which not long ago was the only game in town, have actually increased their profits from back when they used to run the entire show. (4)
Players have access to popular online poker sites and the actual main sites, not some much smaller country specific version, which would probably have been the kiss of death in Denmark anyway. Fortunately for Danish online poker players, they chose life instead, and it’s a pretty healthy and desirable life by all accounts.