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CJEU confirms Danish differentiated tax regime for online gambling

30 September 2014

BRUSSELS, Belgium -- (PRESS RELEASE) -- The General Court of the EU has issued a ruling in State aid cases T-601/11 (Dansk Automat Brancheforening v Commission) and T-615/11 (Royal Scandinavian Casino Århus v Commission), confirming the differentiated Danish tax regime for online gambling. The applicants had challenged the European Commission's decision that a differentiated tax regime for on- and offline gambling is compliant with EU State aid rules. The Court found that the land-based applicants are not individually affected by the tax regime. It confirms that Member States can continue to set a tax level for online gambling that takes into account the competitive global .com offer in order to ensure that consumers are channelled to the regulated offer.

The two cases were brought by land-based applicants against the European Commission’s Decision to approve the Danish taxation model for online and offline gambling, which establishes different taxation levels for the two different types of gambling. The Danish tax level for online gambling was set at a level taking into account the need to channel the Danish consumer towards the regulated online gambling offer which is key in safeguarding the public policy objectives of the Danish Gaming Act. The Court today ruled that such differentiated tax measures are of general application and there is no specific aspect that can demonstrate that the applicants are specifically and individually affected by the tax measure.

According to the Court:

"[T]he 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." (T-601/11, para 52)

EGBA Secretary General Maarten Haijer comments: "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. 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.”

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

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