New Danish Tax Cuts Ignite EU Controversy


11/24/2011
By Debra SaundersGoogle

In Denmark, lawmakers recently passed new tax cuts for online casino operators that will give local operators an edge over their competition around Europe.  To the surprise of many in the industry, the EU commission, the body entrusted with safeguarding fair competition in the Eurozone, authorized the cuts.  While some are outraged by the decision, others are waiting patiently to capitalize on its hidden potential.

The casinos hit hardest by the new codes are the “brick and mortar” casinos.  With a lack of any new legislation in recent years, they still pay an extremely high tax that is about three times as large as the new tax on internet casinos.  With a disparity that large, and considering the high operation costs of a land-based casino, it is no wonder that they are calling the new tax cuts “state subsidies” for online casinos.

On the other hand, internet gambling sites around Europe are sitting tight.  While in the immediate future the tax cuts are going to cause customers to migrate to Denmark, in the long run there is no real way of stopping them from demanding the same treatment from their own local governments.  In light of the EU commission’s lenient stance on individual state low tax rates, there is really nothing holding back the other states from doing the same thing Denmark did.  This will eventually translate to more money in the pockets of online casinos around Europe.

However, one must still ask, was this a wise decision?  Taking into account the obvious long-term ramifications of such a decision in an extremely competitive continental market, it remains to be seen if Denmark’s push to advance their local industry might actually backfire in the long run at the detriment of many European governments. 


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