Danish betting operator Danske Spil has successfully integrated Sportech’s Quantum betting solution into its gaming terminals network, now allowing it to process pari-mutuel bets on horseracing via a greater number of retail points of sale.
In the midst of a challenging year for the Danish gambling market, operator Danske Spil has integrated new betting solutions into its retail point of sale offerings. ©Jonny_Joka/Pixabay
Integration Will Extend Network Offered to Players
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Danish betting operator Danske Spil has successfully integrated Sportech’s Quantum betting solution into its gaming terminals network, now allowing it to process pari-mutuel bets on horseracing via a greater number of retail points of sale.
In close collaboration with Sportech’s Racing and Digital division, as well as Scientific Games, Danske Spil’s integration of the technology provider’s betting solutions into their terminals will expand their retail network to an additional 600 retail outlets across Denmark. The Danish operator expects this expanded service to be widely available to players starting from 2021.
As a result of the implementation, Danske Spil chief executive Niels Erik Folmann predicts more new content becoming readily available to players, as well as more support for the horseracing industry in Denmark being generated overall.
The integration of Sportech’s Quantum betting solutions into Danske Spil’s terminals via Scientific Games ushers in brand new opportunities to widen pari-mutuel horseracing betting pools through the Danish operator’s terminal network, according to Sportech’s senior vice president sales and business development EMEA, Bruno Gay.
Expansion Comes Amidst Drop in Danish Gambling Revenue
The integration arrives on the heels of a challenging year for the Danish gambling market. At the end of August, Danish gambling regulator Spillemyndigheden released their financial report for the first half of 2020. Unsurprisingly, the outbreak of the coronavirus (Covid-19) pandemic meant that the revenue generated in the Danish gambling market dropped down to DKK2.7 billion.
A breakdown of the report reveals that the largest revenue drops originated in the brick-and-mortar casinos operated by Danske Spil. Alongside fixed-odds machines also operated by Danske Spil, these casinos underperformed significantly in the first half of the year due to lockdown and social distancing measures implemented by the Danish government. Revenue generated by casinos during this period dropped precipitously, down to DKK82 million — a decrease of more than 50%.
Alongside fixed-odds machines, casinos were far from the only vertical to experience large dips in revenue as a result of the pandemic. Due to the widespread cancelation and postponement of sports matches, sports betting was naturally also significantly disrupted in the first six months of 2020. Therefore, the uncertainty enveloping this market and the limited betting options on offer resulted in a decline in revenue of DKK1.01 billion for the sports vertical, representing a drop of 19.6% compared to the first half of 2019.
Danske Spil Has Experienced a Difficult 2020 So Far
At the beginning of November, Danske Spil reported a 7% year-on-year decline in gross gaming revenue in its third quarter. The operator’s gross gaming revenue (GGR) for the three months leading through to September 30th equaled DKK3.44bn (£417.4m/€461.5m/$548.4m), which is down from DKK3.69bn in the same period last year.
However, the gross gaming revenue of Danske Spil’s lottery games increased by 2.8%, up to DKK1.92bn. The operator attributes this rise to notably large jackpots being on offer during the period, in turn aiding their Danske Lotteri Spil division.
Nevertheless, other sectors of Danske Spil’s operation were unable to weather the impact of the coronavirus (Covid-19) pandemic, thus resulting in an overall drop in gross gaming revenue.
The gross gaming revenue stemming from the operator’s online betting and gaming division Danske Licens Spil dropped 14% down to DKK1.33bn, while revenue from the Elite Gaming hall arm sank by a whopping 32.5%, down to DKK188.3m. During the third quarter of 2020, Danske Spil paid out DKK359.9m in state tax, along with DKK417.6m in dealer commissions and DKK193.6 in other game-related costs. This resulted in a gross profit of DKK2.47bn, down 0.8% from last year.
While Danske Spil and the overall Danish gambling market have experienced a challenging first half of the year, there are some positive takeaways worth highlighting. Despite significant drops in revenue across almost all sectors and verticals in Denmark, the number of individuals gambling failed to notably increase. Therefore, neither did the rate of problem gambling, which many in Europe (and particularly in neighboring Sweden) feared would become the case as continent-wide mandatory lockdown orders came into force.
Sportech Resists Takeover by Standard General
In related news, the betting technology provider Sportech recently revealed that it has widely rejected the latest of multiple attempts at a takeover by New York-based investment fund Standard General. Several offers were made by the fund, including a 25.0 pence per share offer, followed shortly thereafter by a 28.5 per pence offer.
When the latest offer was made on the 27th of October, Sportech’s shares closed at 18.0 pence per share. However, as the news of the offer broke out, the solutions providers’ shares rose to 22.6 pence per share. Nevertheless, Sportech’s board released a statement asserting that the most recent 28.5 per pence offer by Standard General “fundamentally undervalues [its] businesses and prospects”.
With their attempts made public on the 5th of November, Standard General must now make a decision by the 3rd of December whether to announce a firm intention to takeover Sportech or not. Despite the technology provider refusing to enter discussions on a deal based on all prior offers, Standard General revealed that it still hoped to engage Sportech’s board in fruitful negotiations.
Gambling Industry Overview in Denmark
The following approaches will be presented
- Gambling legislation in Denmark
- Gambling authorities in Denmark
- Online casinos in Denmark
- and more
The gaming and gambling market in Denmark has been partially liberalized since January 1st, 2012. The major part of the activities related to gambling is under the control of a largely state-owned company that is known as Danske Spil. The company in question has been operating since 1948.
The rules were considered too rigid and yet unclear. However, some alterations were implied through the new Act No. 848 of 2010 on Gambling. The Act came into force on January 1st, 2012. After the implementation of the new law, the gambling legislation of Denmark is considered explicit enough to be cited as an example to other countries that are intending to change their gambling regulations.
Overview
Denmark has long been a country with a monopoly imposed over the gambling operations, both the ones situated in land-based and virtual casinos. Then it was vastly changed after the new legislation on the matter came into effect.
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The current Danish gaming and gambling legislation has several major purposes:
- keeping the overall consumption of gaming activities at a certain level
- providing a fair, responsible and fair manner when it comes to gaming operations
- preventing the more vulnerable people, including youngsters, from being exploited through any gaming operations or becoming addicted to gambling
- preventing gambling from being used as a means to support or aid criminal activities
The major law that sets up some rules concerning the different forms of gambling is the Danish Gaming Act.
The Danish Gaming Act, as part of the current country's legislation, is divided into several parts. Part 1 is focused on the purpose and scope of the Act, while Part 2 concentrates primarily on providing some definitions and analyzing certain terms of the law. The next part of the law deals with the variety of licenses for each type of game, while Part 4 is focused on providing the criteria for offering gambling operations on the territory of Denmark.
The rules on duty of disclosure, sale, and marketing policy are described in Part 5 of the law, while Part 6 talks about the requirements towards managers and staff of the gambling venues. The remaining parts are concentrated on the administrative provisions regarding fees and taxes, as well as the order that needs to be followed when it comes to withdrawal and expiration of licenses.
The supervision and exchange of information between the DGA and other bodies of the country's government are also set in the law's provision. Part 12 of the law is focused on the penalties imposed in cases of violating the law, and the last part of the Danish Gaming Act contains the conditions under which the Act itself is to come into force.
Relevant Legislation
Currently, all gambling activities in Denmark are being monitored, controlled, and regulated by the Danish Gambling Authority (the DGA), which on the other hand, is subject to the country's Ministry of Taxation.
The issues related to the legislature of the country on the matter, including European regulation, are handled by a department of the aforementioned Ministry.
Gambling duties' collection, however, is not among the DGA's responsibilities. It is entrusted to another entity that operates under the hat of the Danish Ministry of Taxation, the Danish Tax Authority (SKAT).
When it comes to providing gambling services on the territory of the country, these activities are regulated by the Danish regulation on marketing and consumer protection. The latter is included in the responsibilities of the Consumer Ombudsman of Denmark. The control and monitoring are also entrusted to the Danish regulation on payment services, which work is subjected to the Financial Services Authority of Denmark.
The progress of the country towards a competitive online gambling market was first a bit unclear, especially considering the state-owned gambling monopoly that was imposed in Denmark. Currently, online gambling activities are regulated through the Danish Gaming Act.
Originally, the Danish Gaming Act was part of an agreement reached between the country's Government and the rest of the political parties. It was first proposed by the Minister of Culture and Minister of Finance, who both suggested a law concerning the profits from gambling activities and one that was related to the operation of Danske Spil. The two proposals were combined within the gambling law that is currently in effect in Denmark.
As mentioned above, the primary regulation of the gambling market in the country comes from the Gambling Act. The latter sets a clear differentiation between three major categories of “games”, including betting games that depend on the result of a certain event, lotteries that are based on chance, and combination games where the chance of winning depends on a combination of skill and luck.
All games and activities, which fall within these categories, are to be covered by the scope of the Gambling Act.
There is also a number of secondary Executive Orders that come as a completion of the country's Gambling Act. A few of these Executive Orders are as follows: from No. 65 to No. 67 and from No. 1301 to No. 1304.
The first three cover land-based betting operations, web-based betting, and online casinos, while the next four cover charitable lotteries, gaming machines located in arcades in restaurants, land-based casino venues, and the compensation rates for some games.
The General rules on marketing settled by the Danish Marketing Practices Act also come as regulatory ones when it comes to the provision of gambling on the territory of the country.
There have been some changes made in the country's major legislation after it was officially imposed in Denmark. First, a public consultation related to new and updated certification and technical documents was issued by the DGA in March 2014. Then, the DGA made another change in September 2014, one that was related to the exemption regarding the online casino platforms that would support the means of digital signature in the future.
There was another change in December 2014, when the Minister of Taxation was announced by the DGA to have signed the already-proposed alterations in the aforementioned executive orders concerning online casino and betting operations.
In 2020, Denmark had 8 active licenses for land-based casinos, including two on board ferries, while an additional permit was issued for a brick-and-mortar in Copenhagen, which is expected to open prior to 2020's end. Approval for license considerations made by the Spillemyndigheden (DGA) will be decided upon whether or not the casino will be operated in a fully professional and financially sound manner. Of particular importance is the applicant's experience operating land-based gaming and possessing the required financial liquidity to maintain operating expenses.
Land-based casino licenses are good for up to 10 years.
During the latter part of 2020, the DGA also opened a window in which to accept applications for land-based casino licenses in the jurisdiction, up until January 29, 2021. Also, to be accepted during this period are applications for casinos on board Danish ships in regular service.
Online Gambling
The online gambling market of Denmark was closed for outlanders until 2008. Since then, there have been rumours that the country intends to open it for online casino operators. Two years later, private operators that offered online gambling companies started hoping that they would be permitted to enter a competition with the local ones.
At first, online gambling in Denmark was controlled by Danske Spil, which made the monopolism imposed on the country's gambling and gaming market last for as long as possible.
Nowadays, the new gambling operators that enter the Danish online gambling market must first get a license from the Danish Gambling Authority (DGA). The country, however, is still trying to give an advantage to its state-owned Danske Spil company, so the Government has made sure that foreign gambling operators will get their licenses after a lengthy procedure.
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The DGA has set specific rules in order to deal with the large number of outlanders expected to apply for a license. All applicants go through a special evaluation carried out by the DGA before they receive permission to start operating within the country's borders after the preliminary overview.
More than two dozens online gambling operators were licensed by the SKAT over the first year after the new law came into effect. At the same time, however, Denmark's Government is unyielding when it comes to the prevention of unlicensed foreign gambling websites entering the Danish online gambling market.