EU clears lower taxes for Danish online gambling firms

(BRUSSELS) - The European Commission gave Denmark permission on Tuesday to charge online gambling firms lower taxes than real-life casinos as part of a law breaking a state monopoly of the industry.

The law is in line with EU state aid rules "because the positive effects of the liberalisation of the sector outweigh potential distortions of competition," said the European Union's antitrust watchdog.

The commission said charging higher duties on Danish websites would have rendered the new law ineffective because they would have been hard put to compete with online gambling firms from other EU nations charging low taxes.

The Danish Gaming Duties Act calls for a tax of 20 percent on the gross gaming revenue of websites, compared to up to 75 percent for land-based casinos and gaming halls.

Other EU states with liberalised gambling markets normally apply lower duties to gambling sites, the commission said. In Britain, for instance, websites are charged a 15 percent tax rate while casinos are charged up to 50 percent.

Spain, Greece and Germany, nations in the process of liberalising their gambling markets, also intend to charge different tax rates.

The EU's executive arm launched in December an in-depth investigation into the Danish law liberalising gambling after receiving complaints from land-based gambling operators.

The law was adopted in 2010 but its entry into force was postponed while awaiting clearance from Brussels.