Denmark offshore channelling could rise to 24% on tax rate increase, says report
H2 Gambling Capital estimates 17% drop in GGR since new restrictions were launched in January
Analyst firm H2 Gambling Capital (H2) has estimated that an 8% increase in gaming tax in Denmark would boost offshore channelling to 24% from its current rate of 12%.
A new report commissioned by the Danish Online Gaming Association (DOGA) follows the government’s agreement to increase the gaming tax rate from 20% to 28% in January 2021, with the aim of raising DKK150m (£17.1m), or DKK20m per year.
H2 estimates that onshore channelling is up 60% from 2012 to 85% across the country, but this could fall to 76% between 2021 and 2024.
Gross gaming revenue (GGR) is reported to have dropped 17% since new deposit limits and bonus restrictions were introduced on 1 January 2020 by the Danish government.
The measures are expected to cause a 10% reduction in GGR generated by recreational players, while sophisticated players have caused a drop of 30% in revenue on a lower average spend.
In addition, H2 has said it expects FY20 GGR forecasts to decrease by 12.5%.
However, the report does not account for former Danish monopoly operator Danske Spil, which makes up a significant chunk of the market.
Further, H2 also claims the initial declines could start to level out as customers become accustomed to the new normal.
DOGA CEO Morten Ronde said the report should serve as a deterrent for the Danish government from going ahead with its plans to increase gaming taxation.
“The study shows that while the (licensed) white market plummets, the grey/black market will explode. The result? Less revenue to the Danish State and less consumer protection,” Ronde wrote on LinkedIn.