A new Danish law which subjects online providers of casino games and gaming machines to a duty of 20 per cent on the gross gaming revenue (GGR stakes minus winnings) compared with up to 75 per cent for land-based casinos and gaming halls has been approved by the Commission.

Denmark adopted a new law in 2010 to liberalise its gambling market which up until September 2011 has been a state monopoly. However, the legislation did not come into force pending the results of a European Commission in-depth investigation into complaints over the compatibility of the law with EU state aid rules.

On 20 September 2011, the Commission gave its approval to the new rules. It found that the lower rate of duty for online gambling does constitute state aid. However, it concluded that the positive effects of the liberalisation of the sector outweighed the potential distortions of competition that this might cause. Other member states, including the UK, apply a lower duty on online providers. The Commission accepted that a lower duty for online providers was essential to ensure that there was an incentive for online gaming to operate within a regulated environment. The availability of non-regulated websites, established in other countries, paying little or no tax, means that online gambling regulations must be price competitive.