Danish gambling legislation provides the following definitions of games and their different categories.Games
Lottery, combination games and betting:
- lottery: an activity where a participant has a chance to win a prize, and where the odds are based exclusively on chance;
- combination games: activities where a participant has a chance to win a prize, and where the odds are based on a combination of skill and chance; and
- betting: activities where a participant has a chance to win a prize, and where bets are taken on the outcome of a future event or the occurrence of a future event.
A lottery that is divided into several classes, with separate prize draws for each class.Pool betting
Bets where all or part of the prize depends on the size of the total pool of bets or is split between the winners.Slot machines
Mechanical or electronic machines that can be used for games where the player can win a prize.Online games
Games concluded between a player and a gambling operator using remote communications.Land-based games
Games concluded between a player and a gambling operator or a gambling operator's dealer who meet in person.
Contrary to most gambling regulations, Danish gambling legislation does not distinguish between online poker and other online casino games. Poker is considered a casino game and is not subject to specific regulations, and is consequently regulated under the same rules as any other online casino game.Definitions in law
Fantasy league games are considered and regulated as pool betting and require a licence to be offered. This allows an operator to offer daily fantasy leagues as well as the more traditional season fantasy leagues.
Spread betting is considered a financial product and cannot be offered under a betting licence. The offering of spread betting is restricted to registered financial companies and is regulated under the Danish Financial Services Act LBK No. 1140, 26 September 2017.
Competitive sports for prizes are not considered betting or gambling, and can be offered without a gambling licence. The same is ultimately true for skill competitions, but skill competitions often have an element of chance, for example, a drawing between correct answers in a quiz where more than one participant has the correct answer, but only one can be the winner, and consequently are close to the legal definition of combination games. However, if the questions are not simple to the extent that the average person would get everything right with little or no effort, such competitions are not considered to be gambling and therefore do not require a licence.
Free prize draws are considered gambling as they fulfil the definition of a lottery under Danish law. However, since the element of a wager is not present in a free prize draw, a licence is not required to offer such draws legally, but a gambling duty on the prize must be paid by the operator.Distinction between speculative and hedging financial products
Article 2, Section 3 of the Danish Gambling Act excludes betting on the future value of financial instruments that lie outside the scope of the Gambling Act, and such betting, for example spread betting, is consequently regulated by the Financial Services Act.
This does not exclude all betting on financial products, and it is generally considered inside the scope of the Gambling Act and legal under a betting licence to offer fantasy league-style games on publicly noted shares, bets on which share will perform best on a given trading day, etc.ii Gambling policy
The structure of Danish gambling legislation is that the offering of gambling is generally prohibited unless the operator has a licence to offer gambling.
On the offering of betting and online casino, there is no limitation to the number of licences that can be granted, and anyone who fulfils the legal requirements and satisfies the Danish Gambling Authority that the operation can be run responsibly and will be sufficiently funded will be granted a licence.iii State control and private enterprise
The offering of lotteries as defined in the Gambling Act (except for games positively exempted as allowed casino games) is restricted to state-owned operators. Denmark has three different types of class lotteries, and Danske Lotteri Spil A/S holds the monopoly to offer any other kind of lottery.
All other types of gambling have been opened up to privately owned operators who have obtained a gambling licence.iv Territorial issues
In Denmark, gambling is regulated and licensed nationally. With regards to Greenland and the Faroe Islands, the local governments have full jurisdiction and autonomous authority regarding regulated gambling. Currently, Greenland allows gambling on the same premises as offered in the Gambling Act and the Faroe Islands have continued with a complete ban.v Offshore gambling
The key element with regards to offshore gambling is whether or not an offshore gambling operator is targeting the Danish market.
Under the Gambling Authority's current interpretation and enforcement of the Gambling Act, accepting wagers from players located in Denmark without having a Danish licence is not contrary to Danish law provided that the operator accepting such wagers is not targeting its offering of gambling products at the Danish market.
An operator is considered to be targeting the Danish market if one or more of the following conditions are fulfilled:
- the gambling website is offered in a Danish-language version;
- the operator offers customer services in Danish;
- games are offered that are considered to only be of interest to Danish players. For example, betting on lower-ranking Danish sporting events, betting on the outcome of Danish parliamentary elections, or slot machines with the theme of a Danish TV show, movie and similar screenings unknown outside of Denmark;
- Danish kroner are accepted or offered as a currency on the gambling website;
- there is acceptance of payment services such as the Danish debit card payment system DanKort, which is exclusive to the Danish market;
- there is marketing and advertising in the Danish media;
- marketing and advertising is in Danish; and
- there is direct marketing targeting Danish consumers, where the operator sender is aware that the recipient is based in Denmark.
If an operator targets the Danish market without a Danish licence, the Gambling Authority has shown great commitment to having such an offering shut down. So far the Gambling Authority has had a great deal of success doing this, and in most cases cease-and-desist letters have proven sufficient.
Article 65 of the Gambling Act provides the Gambling Authority with the legal authority to block payment services to an operator offering gambling in Denmark without a licence. The same provision allows the Gambling Authority to block access from Denmark to the violating operator's website or websites.
Further, Article 59 places a complete ban in Denmark on advertising of unlicensed gambling.
In all cases where cease-and-desist letters have proven insufficient to stop the unlicensed offering, the Gambling Authority has successfully gained court orders to force internet service providers (ISPs) to prevent access to certain websites where unlicensed gambling was offered and targeted at the Danish market.
For all the time that the Gambling Act has been in force (currently, more than five years), the Gambling Authority has not made use of its legal authority to block payment services.
After an initial period with a substantial number of cease-and-desist letters and ISPs blocking access to websites, the letters and the advertisement ban, combined with a critical mass in terms of the number of operators with a licence to offer gambling, seems to be sufficient to keep most unlicensed gambling out of the Danish market.
The Gambling Authority estimates the unlicensed offering of gambling in Denmark to represent 5 per cent or less of the total Danish gambling market. The operators are less optimistic but still estimate that approximately 80–85 per cent of the Danish market is licensed and compliant.
The Gambling Authority has not yet had to pursue enforcement, including fines for violation of the Gambling Act, outside Denmark, so the enforceability of the Gambling Act against a foreign operator has not yet been identified.
The Gambling Authority is pursuing and developing cooperation with as many foreign gambling regulators and gambling commissions as it can, in order to improve its chances of receiving assistance if a foreign operator violates Danish law, and to promote a higher degree of uniformity and mutual recognition of standards within, in particular, the online gambling industry.
The Gambling Act does not restrict the number of licences that can be granted in any way, and is therefore in compliance with EU law, at least in terms of the types of games that have been liberalised as a result of the law reform. The EU-wide enforcement of Danish law against a foreign EU-based entity can therefore not be excluded.
However, regarding games that are still part of Danske Lotteri Spil A/S's monopoly, the legality of the Gambling Act from an EU law perspective is unclear. The government has given no justification for maintaining a state monopoly on the offering of, for example, lotteries and scratch cards, and consequently the enforcement of this part of the legislation outside of Denmark is questionable at best.