European gambling laws might change after Denmark’s CJEU ruling

The case started after Royal Scandinavian Casino Arhus, a Danish-operated casino, filed a complaint in regard to the different tax rates which are currently used in order to tax real casinos and online gambling sites in Denmark. They are allegedly illegal and unfair.

The issue arose from the fact that this Danish operator is the one that has to pay the highest taxes in Denmark, compared with foreign operators that have websites accessible from the country. The government’s opinion is that foreign investors need a motivation in order to acquire a license which costs up to $60K and to maintain their business with running costs of up to $250K per year.

In the first phase, the EU Commission considered the Danish government took a righteous decision, but this didn’t stop the casino officials and they forwarded their case to the CJEU. The casino considers that the principle of proportionality within the European Union is blatantly infringed by these preferential taxes between land-based and online-based gambling venues. Free trade becomes restricted as certain companies become subsidized and benefit from much better tax rates.

Netherlands and Portugal might be affected by the decision taken by the CJEU. Both countries are now working on regulating online gambling. Portugal, for example, will pass a bill by the end of this year and it is assumed that they will follow the Danish model of differentiated taxes. The Netherlands bill is already contested by various companies in the country. If the CJEU decides that the odds are in the favor of the Royal Scandinavian Casino Arhus company, Netherlands and Portugal might have to rethink their laws.