Danish state company in double role over tax havens – The Post

Danish state company in double role over tax havens

While the government is cracking down on tax evasion, its gambling franchise Danske Spil is using tax havens to sell games

Danish state-owned gaming company making use of tax havens (photo: BagoGames)
March 30th, 2017 1:28 pm| by Stephen Gadd
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Danske Spil, the state-owned gambling franchise, earns millions by making its casino games available to customer based outside Denmark via companies located in tax havens, reports Børsen.

READ ALSO: Ministry launches offensive against tax avoidance



While the government is trying to crack down on tax evasion, Dansk Spil is making its products available through companies based in Gibraltar and Malta and bypassing corporation tax.

One of the companies in question is Magnet Gaming, which is a subsidiary of game developer Cego, in which Dansk Spil bought a 60 percent stake in 2014.

The International Monetary Fund classifies Gibraltar as a tax haven, and although Malta has the highest rate of corporation tax in the EU at 35 percent, people who don’t live on the island can have it refunded down to an actual level of 5 percent.

It’s only money
However, Danske Spil’s boss, Hans Christian Madsen, can’t see the problem. “It’s not a question of where customers have their offices, it’s more a question of where the games are being offered and whether there is a legal gaming licence.”

Torben Bagge, a tax expert and lawyer with TVC Advokatfirma, told Børsen: “It may well be that you can make money that you otherwise wouldn’t be able to, but that’s also what a businessman says when he uses a tax haven. It is rather odd that the state would want to do that.”

Minister tight-lipped
The tax minister, Karsten Lauritzen, would not be drawn into the discussion, but back in 2014, the Finance Ministry gave Cego a special dispensation to sell games outside Denmark – something that Dansk Spil is not allowed to do under the terms of the 2012 Gaming Act.

Danske Folkeparti and Socialdemokratiet will now ask the minister for an explanation. Dennis Flydtkjær, the tax spokesperson for Danske Folkeparti, can’t understand Danske Spil’s dispositions.

“That doesn’t sound at all good; I’m a bit surprised,” he said.

“I’d question whether a state-owned company absolutely has to go out and compete if this means being involved in tax havens. Their main job is to promote gaming in Denmark.”

The Finance Ministry said Dansk Spil should be run on a “commercial basis”.

“That means that the company should strive to create the greatest possible value for its shareholders,” a spokesperson said.

The ministry did not answer when asked whether it knew that Cego would be selling its products in a tax haven.