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Denmark's Online Gambling Tax Under Fire From European Commission

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In most countries, lawmakers attempt to make the taxes higher at online casinos than land-based casinos in order to protect the land casinos. In Denmark, however, the government has instead decided to tax online gaming operators lower, and that decision has them in possible hot water with the European Commission.

On Tuesday, the European Commission launched a formal investigation into the tax rate set for online gambling companies in Denmark. The operators that receive gaming licenses to run online casinos will pay a twenty percent tax rate. That is much lower than the seventy-five percent tax that some land-based casinos are dealing with in the country.

The EC is usually looking into countries that are attempting to hold a monopoly on the Internet gambling market. These countries tend to make the tax rate extremely high to protect their land-based casinos, but Denmark has taken the opposite approach and it has caught some members of the European Union by surprise.

The EC explained that they have received several complaints stemming from the low tax rate in Denmark. The Commission will now try to figure out whether or not the low tax rate gives a competitive advantage to online operators. If they determine that to be the case, there is a chance Denmark could be facing an unfavorable ruling after the investigation is complete.

The Commission is also encouraging other EU members to give their opinions on the matter. The Commission will then take those opinions into account before rendering a decision. Denmark decided in 2009 to end their monopoly on gaming. The new tax rate is set to take effect January, but the Commission must first approve the rate.

Many countries have opened their online gambling markets at the urging of the European Commission. Most European countries have adhered to the wishes of the EC, but the US is one of the countries that continues to ignore International trading agreements between EU members with their online gaming laws. Several legislators in the US have pushed bills in the past year to end Internet gambling prohibition in the country.

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