Cyprus and Denmark Online Gambling Laws

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The online gambling legislation's in Cyprus and Denmark, which were ironically moving in different directions, have been temporarily slowed down.

In Cyprus online gambling has been allowed under the Betting Law since 2007, which was amended to make it compliant with European Union (EU) regulations. However the Cyprus government lawmakers want to amend the law again and delete online gambling from the permissible betting services. Ionas Nicolaou, chairman of the House Legal Affairs Committee, told the Cyprus Mail that the parliamentary discussions on the pros and cons of amending the law had to be stopped when it was pointed out that a full public consultation had not taken place. The EU directives require that there must be a public consultation and an impact study on possible repercussions before the preparation of any bill. SAKOP, a social organization, pointed out that neither had been conducted in the context of removing online gambling from the allowed betting services. The state has been asked to expedite the required processes but it is unlikely that the matter will come back to the Cyprus parliament till after July 2010. The Cyprus Mail has reported that presently online gambling in Cyprus has a turnover €2.5 billion a year.

On June 4, 2010, the Danish parliament, Folketinget, unanimously passed the laws for liberalization of online gambling. The laws would have allowed the licensing and taxation of online gaming operators. However the land based gambling companies have complained that the tax provisions regarding online gambling are unfair. Under the new law the land slot machine and casino revenues would be taxed at rates from 45% to 75%, but online gambling would be taxed at only 20%. This implies that the
bill will have to go back to the European Commission (EC) for further consideration. These laws were scheduled to go into effect in January 2011, but now the taxation minister will set a new date based on the response from the EC.

The reason for the differential rates of tax proposed may stem from that currently Denmark has a state owned online gambling monopoly Dankse Spil, whereas the land based gambling facilities are privately owned. But the land gambling operators are seeing red. Gunnar Sorensen, director of the Danish Gaming Association, said, "We think it is illegal for the government to support Internet gambling in this way. If two gambling companies do not have the same tax treatment, then the Danish government is effectively supporting the online gambling companies."

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