Aerial view of city buildings during daytime.

Denmark records a slight increase in gambling activity in the first half of 2023

The Danish Gambling Authority, Spillemyndigheden, has recently published the official figures revolving around the gaming industry for the first half of 2023. The total revenue from all gambling segments has increased slightly in the first six months of this year. Although the growth is not rapid, but a slender 1.1% year-on-year (YoY) increase bodes well for the Danish gambling market after it recorded a small decline in the corresponding period last year.

Aerial view of city buildings during daytime.

The Danish gambling market shows a slight improvement in 2023. ©Kristijan Arsov/Unsplash

The Danish gambling industry has a short history, with gambling remaining a state monopoly up until 2012, when the Danish Gambling Act legalized online casinos and opened its doors to foreign operations. Denmark was the first Scandinavian country to open its gambling market to the international scene, presenting operators with a lot of flexibility. Its Nordic neighbours, Finland and Norway, still have active gambling monopolies and do not allow private companies to operate within their borders. While the Danish monopoly has ended for several gambling segments, it still exists for lotteries. Danske Spil monopolizes the segment in Denmark and is the only legal operator that offers lottery and scratchcards. The Danish gambling regulator became an independent authority in 2013. The country has a legal and strictly regulated gambling industry. The provision of gambling in the jurisdiction is subject to the Anti-Money Laundering (AML) Act and general rules on marketing in the Danish Marketing Practices Act, which supplements the marketing provisions in the Gambling Act.

Despite abolishing monopolies for almost all segments of gambling, the Danish gambling market has been struggling recently. Denmark was one of the many regulated gambling jurisdictions in the world that were affected by the COVID-19 pandemic. Land-based operations came to a standstill as overall revenues dipped in many countries. However, as the world recovered, the markets bounced back over the last couple of years. Unfortunately, Denmark was not on the same track, and its regulated market recorded a decrease in annual revenue at the end of last year. After struggling in 2020 and 2021, the market was expected to bounce back with decent figures. However, that was not the case. The only positive for Denmark in the annual report last year was that the dip was not quite significant. Hence, recovering from it was not a mountainous challenge. This year, Spillemyndigheden will rely on all gambling segments contributing to the gambling sector to bring the revenue back up to a decent level.

Lottery products are the biggest segment of the Danish gambling market, with the online gambling sector being the second-largest segment. The online gambling market in Denmark is projected to grow by 4.64% between 2023 and 2027, resulting in a market volume of $1.30 billion in 2027. Denmark ranks fourth in Europe in terms of online gambling share. The gross gambling revenue from online casinos in Denmark consistently increased yearly, amounting to DKK 2.45 billion in 2020. In the first half of 2023, the Danish gambling industry reported positive results. The regulated gambling industry in Denmark reported a 3% rise in Gross Gaming Revenue (GGR) during the second quarter of 2023, reaching DKK 1.74 billion (€233.5 million). Additionally, the GGR from casinos grew by 8.7% YoY to DKK 175 million (€23.5 million) in the first half of 2023. Denmark’s largest gambling segment by revenue in the year’s second quarter was online casinos, with a 6% rise to DKK 747 million.

The Danish Gambling Authority has launched monthly statistics on its official website, which show a 1.1% increase in June 2023 earnings as compared to last year. The country’s total GGR for the month of June this year was DKK 513 million (€68.8 million). However, in the month-on-month report, this also showed a decrease from the previous month, May 2023, by 13%. Online casinos accounted for DKK 238.0 million, a YoY increase of 8.1% from June 2022. Sports betting generated DKK 154.0 million in GGR, which was down by 1.9% against last year, whereas slots faced a 7.1% fall from 2022, standing at DKK 91 million for June 2023. The fall in numbers is not considered worrisome, as June is traditionally a slower month for sports betting following the end of the football season. Though there has been a slight fall in the numbers YoY since June 2022, the overall H1 results for the industry are up from the 2022 numbers. The overall GGR across the country’s four main segments came to DKK 513 million (€68.8 million) for the first half of 2023. This is a YoY increase of 5.17% for the industry.

Annual revenue went down last year

The Danish gambling industry’s consolidated results for 2022 showed a marginal decline in annual revenue. The total GGR for the year was DKK 6.7 billion, which was marked by a 7.5% YoY increase. However, the Danish Gaming Authority released a report showing that the country’s gambling sector experienced a 2.8% fall in 2022, largely caused by a fall in digital revenue. The betting segment contributed DKK 2.3 billion to the total GGR, which was a 10.8% decrease from the DKK 2.6 billion recorded in 2021. Two of the smaller gambling segments, gaming machines, and land-based casinos, were the only ones that showed growth as compared to 2021.

Spillemyndigheden revealed that the gaming machine segment, despite being the smallest segment in the industry, had grown a whopping 36.8% YoY. This was mainly due to the pandemic, which led to the physical activity being restricted for the better part of 2020 and 2021. Revenue from gaming machines increased from DKK 843 million in 2021 to DKK 1.15 billion last year. The largest segment of the industry was online casinos, contributing DKK 2.88 billion to the GGR, which was up 2.1% as compared to 2021. Despite the setback faced in 2022, the Danish gambling industry is eager to bounce back strongly this year. So far, it has recorded a 5.17% YoY growth in the first half of the year. The online gambling market in Denmark is projected to reach €1.02 billion in 2023.

AML breach landed Betfair in trouble in Denmark

The Danish Gambling Authority has stringent measures in place to reduce problematic gambling. The provision of gambling in Denmark is subject to the Anti-Money Laundering (AML) Act and general rules on marketing in the Danish Marketing Practices Act, which supplements the marketing provisions in the Gambling Act. Operators are required to obtain a license to offer gambling services in Denmark. The licensed games in Denmark shall also have their games certified in accordance with the Danish Gambling Authority’s (DGA) certification program. Additionally, licensed games are subject to the Danish Gambling Duties Act. Recently, licensed operator Betfair International was found in violation of the country’s Anti-Money Laundering Act.

As a result, Spillemyndigheden issued three orders against Betfair, highlighting the violation and instructing the operator on how to rectify its errors. The gambling authority determined that Betfair’s risk assessment measures did not comply with the prerequisites specified in the AML Act.

Denmark’s regulatory authority is also increasing its efforts to ensure legal and ethical gambling in the country. The regulator has recently announced a collaboration with three different companies to curb match-fixing. The Spillemyndigheden has established partnerships with Sportradar, United Lotteries for Integrity in Sport (ULIS), and the International Betting Integrity Association (IBIA), all of which monitor betting activity on sports events worldwide. All three companies will alert the Danish regulator if they find any unusual activity or patterns in betting on sports events in the country. Any such alarm will be investigated, and if found guilty of match-fixing, the case will be referred to the police.

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Author: James Richardson