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Denmark's Hidden Jewel

26 June 2008

TV2, a state-owned broadcaster in Denmark, has become the country's first domestic company to provide online skill games with real-money wagering. No hostile response is expected from the government or the gambling monopoly, Danske Spil, because games of skill are not covered by national gambling laws.

TV2's games Web site, Spil.TV2.dk, provides a variety of games in which players can wager that they will defeat their competitors in a game or tournament.

The games are such that outcomes will almost always favor the competitor who performs with greater skill, talent and knowledge. In none of the games will an outcome be decided by random chance.

TV2's offering is standard when compared to other online skill-gaming networks around the world, and consists of games like billiards, backgammon, dominoes and mah-jongg.

"We've looked into the legalities of this together with gaming officials," Lard Bernt, director of TV2 Net, told The Copenhagen Post. "They differentiate between games of chance, which are covered by the monopoly, and games of skill, which are not."

Essentially, companies other than Danske Spil, the national lottery operator, can offer wagering games in Denmark if they are predominantly games of skill, as opposed to games of chance. And because the games are exempt from gambling laws, they are also exempt from gambling levies.

Even the game of poker, which has lost the skill-versus-chance battle in other countries, is well on its way to being legally recognized as a game of skill in Denmark.

Last July, a municipal court in the Copenhagen suburb of Lyngby declared poker a game of skill.

The case dealt with a complaint, leveled by Horesta, a restaurant and hotel trade association acting on behalf of licensed casino operators, that the Danish Poker Association violated the country's criminal code by hosting poker tournaments.

Because poker was determined to be a game of skill, no gambling was taking place. Fredrik Hostrup, president of the Danish Poker Association, was not held accountable, therefore, for perpetrating illegal gambling.

"If you look only at the text of the law and the preparatory comments to the legislation, then the predominance test is the only applicable test," Henrik Norsk Hoffman, the lawyer who successfully defended Mr. Hostrup, told Interactive Gaming News in a telephone interview Thursday. "We have sufficient scientific material to document that a poker tournament is not a game of chance."

The case has been appealed to the Danish Supreme Court and should be heard sometime this fall. Incidentally, Danske Spil does not offer poker on its Web site.

Meanwhile, the market for those games that clearly are skill-based could start to get more crowded.

"If we look aside from poker, any game that can pass the predominance test will be excluded from all the gaming prohibitions we have here," Mr. Hoffman said. "A company is free to offer any game that can pass the predominance test as a skill game. It's always been like this.

"Denmark has been a small market," he continued, "but it's a growing market, and I think with more international focus on this, more and more operators will find a way to do business knowing this.

"The reason why we haven't seen much of it is probably because it has been an unknown fact."

Denmark's Hidden Jewel is republished from iGamingNews.com.
Bradley Vallerius

Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com
Bradley Vallerius
Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com