Danish Gambling Update Limitations on Advertising and B2B Licensing

April 30, 2023 | Advertising

DENMARK (April 20, 2023) — Interesting things are happening in Denmark, Finland and Sweden. Our Nordic Gambling team looks back at what has happened in 2022 and gazes into the crystal ball to give their view on what 2023 will offer in the Nordics. Next in line is Denmark and the crystal ball includes limitations on advertising and B2B licensing in Denmark.

Denmark

In 2022, Denmark celebrated the 10-year anniversary of the Danish Gambling regulation. Not with pomp and circumstance, but with a gambling tax hike and a couple of adjustments to the rules on marketing.

As of 1 January 2021, the tax on gross gambling revenue was raised from 20 per cent to 28 per cent. The critics of the tax hike put forward arguments that the tax hike would lower the proliferation of licensed operators and tempt players to the grey or black markets, which is neither in the DGA’s, the licensed operators’ nor Danish politicians’ interests. However, sometimes politicians are focused on the theoretical tax revenue of a tax hike, rather than whether it is prudent, realistic, or even worth the tax hike from a cost-benefit analysis. When the tax hike was discussed in Parliament, the Danish Ministry of Tax answered a question that; by raising the tax, there would be revenue (expected to be approx. 20 million EUR) which would go towards financing the Danish welfare state and reducing the consumption of gambling – without any reference to which expert group had concluded that. The Ministry further acknowledged that the tax hike would involve players going to the unregulated market(!). So, it turns out you can put a price on problem gambling…

In March 2022, the DGA updated their guidance on sales promotions. Under the Danish Gambling regulation, sales promotions are subject to limitations, including a maximum value of 1,000 DKK (approximately 135 EUR), specific information requirements as well as limitations on playthrough requirements and time limits. The DGA clarified their definition of ‘cash back’ and other loyalty programmes, of ‘chances of winning’, of tournaments and rankings and of draws. Further, the DGA adjusted their approach when calculating the value of draws. Finally, the DGA has elaborated their view on ‘Media with unlimited space’ and its view when marketing is on third-party websites and the use of banners.

The DGA further updated their definition of cashback and other loyalty programmes, so it should be clearer for operators and players when a cashback or loyalty programme is a fixed integral part of the offering – excluding it from the sales promotion requirements. If the programme is not a fixed integral part of the offering, it will be a sales promotion, and subsequently subject to the sales promotion requirements. As an example, the DGA states that if the programme is offered to all players on the same terms, regardless of stakes and/or winnings then it is most likely part of the structure of the offering, particularly if the player cannot opt out of the programme.

Basically, the same view is taken on ‘Extra chances of winning’. If it is a fixed integral part of the offering, then it is part of the structure of winning, but if the extra chances are not, it will be a sales promotion.

The DGA emphasised that tournaments if players are playing against each other, are a sales promotion. The same applies to rankings.

Jackpots on the other hand will be a fixed integral part of the offering and subsequently not a sales promotion, except if the jackpot is reserved for specific players. The same applies to ‘boosted odds’, if they have ‘commercial intent’ rather than being a fixed integral part of the offering if: 1) the boosted odds are offered to everyone, and 2) no special requirements must be met to receive the boosted odds. If these two requirements are not met, the boosted odds will most likely be considered as a sales promotion.

As for what the DGA call ‘Media with unlimited space’, the DGA assumes that if there is room to either inform the players of the most relevant or all significant terms associated with the offer, then it does not matter if the website belongs to the gambling operator or a third party.

Regardless of whether you agree with the DGA’s view and definitions or not, the guidance has become much clearer.

This July the DGA has further updated their guidance due to the updates to the Danish national online identification service, which is now ‘MitID’ instead of ‘NemID’ and other minor changes.

The latest initiatives contain enforcement initiatives including a whistle-to-whistle ban for commercials, i.e. a total ban on advertising from 15 minutes prior to the beginning of a sporting event until 15 minutes after the sporting event, a ban on commercials for bonuses, a ban on TV commercials at specific times and a ban on using professional athletes and “other authorities” in commercials, stopping “gambling in disguise” and limiting exposure for marketing for children. However, these initiatives were proposed by the last government, and they did not manage to implement them before there was a general election in Denmark, which meant the that former one-party minority government was changed to a multi-party majority government. However, one of the parties in the new majority government are not in favour of the suggested changes, so we are now waiting to see what happens. For now, it does not seem that any of the parties wish to use political capital to make significant changes.

Looking into the crystal ball – which is always associated with a sense of anticipation and anxiety – it would not come as a surprise if in 2023 there are talks about B2B licensing, a further limitation on marketing and further initiatives for protecting problem gamblers, based on the above-mentioned latest alternative, and the DGA will be looking further into a central registry of players.