Online gambling legalisation delays in Denmark

Q2-2011 now looks a more likely date…and that black period is causing concerns

Denmark’s slow march toward the abandonment of its state monopoly on internet gambling is set to experience further delays, according to a Ladbrokes executive, and Betsson’s chief executive is undecided on whether the Swedish company will apply for a licence.

Back in July this year, the Danes started accepting licence applications after earlier agreeing under pressure from the European Commission to some liberalisation.

The snag was that applicants had to cease all activity in the market for a six month period until the licenses became effective, originally estimated to take place around January 2011. This ‘black period’ condition was widely interpreted as an attempt to create a protective cushion around state monopoly Danske Spil, giving it a significant advantage over its eventual competitors.

Licenses cannot be issued until the EC has completed a review of the draft law liberalising the market, which includes provisions for ISP and financial blocking of unlicensed operators.

Assuming there are no complications, a tentative date of October 11 has been set down for the issue of licenses, but interested parties fear that the Danes may impose the ‘black period’ from that date, further prolonging their exclusion from the action.

There has apparently been no shortage of licence applications, and last week a well informed Ladbrokes executive opined that the black period could be extended further, perhaps as far as the second quarter of 2011, a delay justified by the licensing process.

This week Betsson chief executive Pontus Lindwall revealed that his company is unhappy with the taxation aspects and the black period, and remains undecided on whether to seek a licence.

He said that he additionally saw no reason for the Danish proposal that lottery, horse betting, bingo, keno and scratch cards should remain the sole prerogative of Danske Spil

In the meantime he has complained to the European Commission on grounds that the Danish approach contravenes European Union law.

Unconfirmed reports suggest that the Danes want all the advantages; there are indications that the Danish Gambling Board wants to let Danish-licensed companies access the player equity available in international markets, although competitors in those markets cannot operate in Denmark unless they have a local licence.

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