EGBA welcomes ECJ ruling on Danish tax regime

EGBA welcomes ECJ ruling on Danish tax regime

Friday, September 26, 2014

European Gaming and Betting Association secretary general Maarten Haijer has welcomed a ruling today (Friday) by the European Court of Justice (ECJ) to uphold Denmark’s differentiated tax regime for online gambling companies.

The Danish Slot Machine Association and a land-based casino had challenged an earlier decision by the European Commission to approve Denmark’s approach of setting lower tax rates for online gambling companies, claiming that the regime did not comply with European Union state aid rules.

However, the ECJ has ruled that the land-based complainants are not individually affected by the tax regime and added that EU member states can continue to set a tax level for online gambling that helps to channel consumers towards regulated services.

“We welcome today’s decision of the Court confirming that the Commission correctly argued that online gambling requires a tax level that takes into account the competitiveness of the global online .com offer,” Haijer said.

“With the unregulated offer just one click away on the internet, consumers will only play within the regulated environment if that offer is sufficiently attractive in terms of price and consumer experience.

“There are plenty examples of member states where the regulated offer fails to attract consumers due to product restrictions and tax levels, resulting in those consumers being pushed outside the European regulatory umbrella, often to unregulated Asian offerings.”

The ECJ’s ruling will come as welcome news for authorities in the Netherlands, which have proposed a similar tax regime to be introduced next year.

“Having a restrictive market defeats the purpose of any regulation, namely ensuring proper consumer protection,” Haijer added.

“An appropriate tax level is one of the key elements in creating an attractive and safe playing environment, albeit not the only one.

“It is important to emphasise that EGBA does not consider a differentiated tax regime as an objective in itself. But it is imperative that the tax level for online gambling is set at a level that allows for a competitive regulated market compared to the unlicensed offer from outside of the EU.”

The Court said in its ruling: “The applicant has not demonstrated... that the aid measure in question was liable to have a substantial adverse effect on the position of one or more of its members on the market concerned. The applicant’s members and, consequently, the applicant are therefore not individually concerned by the contested decision.”

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