In a bid to curb unregulated activities, The Danish Gambling Authority, Spillemyndigheden, recently ended the operations of many websites in the country. One of the biggest challenges for the Dutch regulator is to ensure there are no unregulated gambling operators in the country, that do not contribute to the country’s Gross Gaming Revenue (GGR), pose unhealthy competition to the licensed operators, and increase the risk of problematic gambling. The Spillemyndigheden had recently filed a complaint against several unlicensed gambling websites operating within its borders. The regulator won its case against the illegal websites and the Copenhagen City Court ordered 49 such websites to be shut down.
The Danish Gambling Authority, Spillemyndigheden, has been in a war against illegal gambling activities in the country for a while now. In the past, the regulator has been successful in blocking access to 25 illegal gambling websites in Denmark in 2019. Since the year 2012, a total of 276 illegal websites offering gambling products within the boundaries of Denmark have been successfully blocked by the Danish regulator. The regulator has been active in regulating the gambling industry in Denmark, including releasing gambling data reports, granting sports betting licenses, and no longer being subject to enhanced confidentiality rules. Accessing illegal gambling websites in Denmark is a violation of the country’s gambling laws and can result in consequences for both the customers and the operators of the websites. If a customer is found operating an illegal gambling website, the consequences can include blocking access to such a website, being unable to withdraw any winnings from the illegal operator, and a potential fine and ban on being able to gamble. Similarly, for the unlicensed operator, The Danish Gambling Authority can petition the district court to have the illegal website blocked. The operators of such websites may be fined and imprisoned if caught operating within Denmark as well.
The Danish gambling market was partially liberalized in 2012, with the Danish Gambling Authority overseeing all activities in the market ever since. Obtaining a gambling license is a crucial requirement for operating a gambling website in the country, as only licensed gambling operators are allowed to provide gambling services in Denmark. The license includes all forms of online gambling, including casino games, sports betting, poker, lotto, bingo, and more. The online operators must comply with the Danish Act on Gambling and other relevant legislation, such as the AML Act (Anti-Money Laundering Act) and the Danish Marketing Practices Act. They are also subject to the country’s financial regulations and consumer protection regulations. To operate in Denmark, a gambling operator must have the server on which the gaming software and other operational software are run physically located within the country’s boundaries. Operators wishing to offer their services to Danish gamblers must also be residents of Denmark. To obtain a license, the operator must comply with legal requirements, certification of games, and server location. The Danish Gambling Authority reviews the application and if approved, the operator will be granted a license for up to five years.
Many illegal operators do not want to go through the tough process of obtaining a license and look for ways to make easy money by running unlicensed websites in regulated markets. The Danish Gambling Authority has worked tirelessly to stop such websites from offering services in the country. The regulator has gone to court nine times since 2012 in order to file a complaint against unauthorized websites. This year, it petitioned the Copenhagen City Court to block 49 such sites that were found operating without licenses. On 14 July 2023, the court ruled in favor of the Gambling Authority in all 49 cases. Of the blocked websites, 13 were so-called skinbetting websites, that offer betting, poker, or casino games where the deposit and winnings are a skin, a virtual object used in computer games. In another move to curb illegal activities, the regulator has also decided to block websites twice a year going forward, as opposed to the annual blocking since its inception.
Director of the Gambling Authority, Anders Dorph, highlighted the importance of protecting Danish gamblers from illegal operators.
“It is a very important task for the Gambling Authority to ensure that Danes are not exposed to games that do not comply with the requirements for consumer protection laid down in gambling legislation. We must ensure that the game providers who have a license to offer games in Denmark can operate on the Danish market without unreasonable competition from providers who do not have to meet Danish requirements. We are constantly trying to optimize our efforts against illegal gambling, and one of our newest measures is, among other things, to block illegal websites more often than before. This means that the illegal sites are active in Denmark for a shorter period, as the time from when we identify them to when they are blocked is shortened.”
Betfair penalised by Danish Gambling Authority
World-renowned gambling operator Betfair International recently came under the radar of the Danish regulator as it was found in breach of the country’s Anti-Money Laundering requirements. The Danish Gambling Authority detected four counts of violation of its AML Act. As a result, Spillemyndigheden issued three orders to Betfair. They highlighted the violation and contained instructions on how the operator can rectify its errors. The violations were found in Section 7, Subsection 1, and Section 8, Subsection 1 of the law.
According to the Danish Gambling Authority, Betfair failed to comply with the legal requirements for risk assessment measures specified in the Anti Money Laundering Act. The regulator issued three orders in addition to the fine. Order A was to rectify the risk assessment procedures to comply with the Danish law. Order B consisted of three issues with the operator’s business procedures for customer due diligence measures. Betfair will need to rectify these to comply with Section 10 of the AML law. Order C was for the operator’s failure to document internal checks, which led to the earlier breaches. The regulator issued a three-month deadline to Betfair to rectify these errors in their policies and realign with the AML measures of the nation.
Danish gambling market grows in 2023
The measures taken by the Danish Gambling Authority are working in favor of the gambling market in the nation, which has reported a slight increase year-on-year (YoY) in the first six months of 2023. Recently published Q2 and H1 2023 results from the Danish regulator revealed there is a marginal 1.1% YoY increase in the size of the nation’s gambling market. This is good news after the market reported a slight decrease at the end of 2022.
Denmark’s total GGR for the month of June this year was DKK 513 million (€68.8 million). The gambling sector reported a 3% rise in revenue to DKK1.74 billion (€233.5 million) in Q2 2023. Revenue in the online gambling market is projected to reach US$1bn in 2023, with an expected annual growth rate of 4.74% from 2023 to 2027. The latest figures show that GGR for the first half of 2023 across sports betting, gaming machines, online casinos, and land-based casinos came to DKK4.6bn (approximately €618m), up by 5.17% year-on-year.
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