Danish Gambling Law Violates EU Legislation?

8 March 2004

Freddy Blak, who has been a Member of the European Parliament since 1989, found that the Danish gambling law is in direct violation of the EU legislation.

Therefore he urged the Danish Government to amend the law in a way that would make it in line with EU legislation.

Since the beginning of 2003, Freddy Blak, one of 625 members of the EU Parliament, has been in close contact with the Director-General (DG) of the Internal Market to send a formal notice and complaint to the Danish Government.

Chosen as an independent Socialist, Blak explained from his office in Brussels why he wants to change the gambling law in his home country.

"Be aware, I am not against the Danish monopoly, Dansk Tipstjeneste," he said, "However, I find the Danish law to be in direct violation of EU legislation on several points.

"First of all, it violates the freedom of establishment, since it restricts the possibility of foreign companies to set up business in Denmark for the purpose of offering games.

"Furthermore it restricts the free provision of services in that section 10 of the Danish act prohibits advertising for companies that have not been granted a license, which means all gaming providers besides Dansk Tipstjeneste.

"Finally, it is pure and simple hypocrisy when the Government and the monopoly claim that there is a need to protect consumers from foreign gaming providers. The reasoning is that a larger supply of games will mean excessive gaming addiction among Danish consumers. The monopoly, at the same time, has one of the largest advertising budgets in Denmark.

"Furthermore, the monopoly continues to introduce one new game after another in a continuous flow.

Blak continued, "One of the worst examples of this hypocrisy is the automatic gaming service that the monopoly has introduced. This gives consumers the possibility of opening an account of up to 30,000 DKK-- approximately 4,000 Euro-- which will than be spent automatically on games chosen by the consumer.

"Therefore I have urged the Danish Government to amend the law so that it will be in line with the EU legislation.

"Above that we see a pressure from the UK, which is treating a draft bill which will legalize all sorts of gaming services including Internet casinos, etc. There is also the directive on services which is in the pipeline from the Commission and which deals with gaming, among other things."

Freddy Blak expects that in the coming week a formal EU notice that would change the relatively new Danish gambling Law will be forwarded to the Danish Government to

However, the Head Legal Adviser of the Danish Gaming Board, Morten Rønde, has a different opinion. When we contacted him, he first stated that as a civil servant he must refrain from commenting on political issues, but he added that he would gladly comment on the legal matters mentioned by Freddy Blak.

Rønde stated, "In connection to the recent Gambelli ruling, the Legal Adviser to the Danish Government (Kammeradvokaten) was asked to make a comprehensive report about the ruling and an analysis on its impact on Danish law. This report was published on 28 November 2003.

"According to this report, the Gambelli EC-Court ruling does not imply that a foreign gaming provider has a right to establish his company in a member state if the company complies with the conditions set up for the licensed (sole) provider of games. This view is supported by the Commission in preamble 35 to the services directive that Mr Blak mentions."

He adds, "Mr Blak comments on section 10 of the Danish gaming law (Pools and Numbers Game Act), which he believes contains restrictions in the freedom of establishment and the free provision of services. Based on this, Mr Blak concludes that the Danish law therefore is in breech of the EC Treaty.

"Firstly, I would like to agree that the Danish gaming law contains provisions which can restrict the freedom of establishment and the free provision of services. But I believe that the EC Court also in the Gambelli case upheld the member state's right to impose these kinds of restrictions if they are justifiable and proportionate."

According to Morten Rønde the Danish law is designed in a consistent and systematic way to limit gaming and gambling in order to:

- prevent excessive gambling and economic crime,

- to ensure consumer protection, and

- to limit private profit from gambling.

Finally, Morten Rønde mentioned that the Gaming Board has no knowledge of a game where the gaming operator can deduct stakes automatically from the players account. There is, however, a service where the player can participate in the national lottery (LOTTO) every week based on withdrawals from the players bank account.

Mr Blak's, assistant, Christoffer Marckmann, stated, "I would like to react to this statement. If you go to the website of Dansk Tipstjeneste, you can open an account of up to 30,000 DKK. From this account, you are able to play the various games that the monopoly has to offer online (i.e. all games except the so-called "scratch cards"). Of the 30,000 DKK, you can play up to 5,000 DKK per day, which is the maximum amount that you can gamble from your account. This means that you can gamble away up to 35,000 DKK per week with the online gaming service (5,000 DKK/day)."

Marckmann added that the Head of Information from Dansk Tipstjeneste made a statement to one of the major Danish newspapers, stating that soon the monopoly will be introducing the possibility of playing "LOTTO" and "oddset" via mobile telephone, which according to Mr Blak's assistant is another example of the "pro-active" attitude of Dansk Tipstjeneste.

Marckmann also explains that other EU member countries are in direct violation of the EU legislation. "However," he says, "it is true that many Member States' gambling laws are also in direct violation of the EU legislation, according to our view. However, we have concentrated on Denmark, since we have knowledge of the Danish legislation." "Therefore, Blak has not taken any action against other gambling/gaming jurisdictions. But if the Commission sends a letter of formal notice to the Danish Government, we see this as a wake-up call for other Member States to start considering amendments to their legislation.

"Furthermore, we believe that there will be changes and harmonization when and if the British bill on gambling is adopted and the Directive on Services gets further in the legislative process. We see these things as being very closely linked."

Rob van der Gaast has a background in sports journalism. He worked for over seven years as the head of sports for Dutch National Radio and has developed new concepts for the TV and the gambling industry. Now he operates from Istanbul as an independent gambling research analyst. He specializes in European gambling matters and in privatizations of gambling operators. Rob has contributed to IGN since Jul 09, 2001.