Version: 11022003
Editor: Franka Pals
Publisher: Novamedia
Disclaimer: Novamedia disclaims all liability for information provided within the "Novamedia European Gaming and Lottery Files". The information is supplied by independent journalistic sources. No parts of these files may be reproduced in any form by print, photo print, microfilm or otherwise, or re-distributed electronically in any form without written permission from the publisher
Kingdom Denmark is a country in northern Europe, between the North Sea and the Baltic. The country's total area is about 44,000 square km. The Jylland peninsula is connected to the continent and has a 68-km land border with Germany. The rest of the country is made up of 406 islands, giving a total coastline of 7,300 km.
Copenhagen is the capital and has a bridgetunnel link to connect with southern Sweden.The Kingdom of Denmark also includes the world's largest island, Greenland, and the Faroe Islands, both in the north Atlantic.With a population of 56,000, Greenland has an ice-free area of 342,000 square kilometers, or eight times the size of Denmark. Greenland joined the European Community together with Denmark but withdrew Feb. 1, 1985 after a referendum in 1982.
The Faroe Islands, with a population of 44,000, have an area of 1,399 square kilometers. The islands have had a selfgoverning home rule since 1948 and have never been a member of the European Community.Denmark is internationally well known by its famous fish- and dairy products, the famous Tivoli Gardens, Lego (land), Hans Christian Andersen Fairy Tales (did you know that Andersen had a learning disability?) and the statue commemorating Hans Christian Andersen's fictional character the little Mermaid at the seaside in Copenhagen.
Denmark is member of the European Union (EU). The EU is the result of a process of cooperation and integration which begun in 1951 between six countries. Four enlargements and 50 years later, today's EU consists of 15 Member States of varying sizes and with different economic and political systems. Altogether, the Member States have 374 million inhabitants and extend over 323 618 000 km2. EU Member States are: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Ireland, Luxembourg, The Netherlands, Portugal, Spain, Sweden and the United Kingdom.
Denmark obtained an opt-out of joining the Euro after voters initially rejected the Maastricht Treaty in a referendum in June 1992. A referendum held in September 2000 to determine whether to join the single currency was rejected by 53 to 47 percent. The Danish government announced in January 2002 that a second referendum on the issue will probably be held in2003.The Danish currency is still participating in the Exchange Rate Mechanism (ERM-2) and is pegged within a 2.25% band against the Euro.
The Copenhagen Stock Exchange (Københavns Fondsbørs) dates back from the 17th century. In his drive to turn the capital into a commercial, international centre, King Christian the Fourth, realised the Copenhagen Exchange. The ships could dock outside the Exchange building and unload their goods. The horse and carriages drove up the slope at the end of the building right into the magnificent hall where a market was organised. And where goods are traded there is always need for credit and cash money. The precursor of commodities came into existence.
The first credit association emerged in the ashes of the Copenhagen fire in 1795, where 25,000 citizens of Copenhagen became homeless. To amend the catastrophe, a group of wealthy Copenhagen businessmen combined their forces and established the "Credit Association for House Owners in Copenhagen”. As a completely new financing concept, a bond loan system with a special state benefit was applied. The credit association idea soon became a success, and within two years a total of 1,132 new houses were built.
Now the Copenhagen Stock Exchange (www.xcse.dk) is a modern high tech exchange with electronic order form. The Copenhagen Stock Exchange is part of the NOREX Alliance, which currently consists of Copenhagen Stock Exchange, Iceland Stock Exchange, Oslo Stock Exchange and OM Stockholm Exchange and is aiming at creating a liquid and cost effective market place for trading in Nordic securities. The Alliance consists of independent exchanges sharing the same trading system and a common regulatory framework. It is the first exchange alliance for equity trading in operation.
In April 2002 he turnover on the equity market amounted to DKK 48.9 billion, which was an all-time high since the new reporting rules were implemented in July last year and corresponds to an increase of 34 per cent compared with March. The turnover should moreover be seen in the light of a coinciding fall in the KFX Index of 8 per cent. The average daily trading volume reached DKK 2.4 billion, an increase of 27 per cent on March 2002.
| Population: | 5,368,854 (July 2002) |
|---|---|
| Age Structure | 0-14 years: 18.7% (male 514,589; female 488,121) (2002 est.) (Source CIA) |
| Currency: | Danish Krone, DKK 1 DKK = 0.1346 Euro (EUR) 1 Euro (EUR) = 7.4251 Danish Krone (DKK) 1 Danish Krone (DKK) = 0.1450 US Dollar (USD) 1 US Dollar (USD) = 6.8965 Danish Krone (DKK) (25.02.2003) |
| GPD | purchasing power parity – $149.8 billion (2001 est.) GDP – real growth rate: 1.1% (2001 est.) GDP – per capita: purchasing power parity – $28,000 (2001 est.) (Statistics Denmark) |
| Internet: | Internet Service Providers (ISPs): 13 (2000) |
| Telephones | Telephone main lines – 4.785 million Mobile phone penetration – 1.444.016 |
The Danish Minister for Taxation established an inter-ministerial working group in December 1999 to pave the way for the modernisation and unification of the existing gaming legislation. In addition, the group was to assess the possibilities for maintaining national control of the Danish gaming market on the Internet.
The working group published on May 7, 2001 its conclusions and recommendations in the report "The Future of Gaming in Denmark the Need for Unified Gaming Legislation” (www.skm.dk/pub1/ internetspil/english). The report is primarily a discussion paper for a political debate.
The large majority of European countries have issued or are expected to issue permits for Internet gaming in accordance with a policy that allows regulated (and often state-controlled) gaming that is only directed at each country's own citizens.
This European unanimity is expressed, for example, in connection with cases under the European Court where the countries' governments have made statements in support of preservation of their right to regulate their own gaming markets.
A significant exception is Great Britain, which has given its bookmakers unhindered access to direct their gaming business at other countries, e.g. Denmark.
As mentioned earlier, the historical reason for this is that bookmakers have not been considered as gaming companies, but as ordinary businesses. Hence bookmakers are not regulated as gaming. In the gaming policy area itself, though, there is no doubt that Great Britain supports the principle of nationally regulated markets.
The Gaming Board for Great Britain thus also participates actively in the meetings of the European gaming authorities' cooperation forum GREF (Gaming Regulators European Forum). GREF (www.gref.net) has served as a forum for debate and exchange of information over the past 10 years.
$One of GREF's main achievements is the drawing-up of an ethical codex at its 1998 meeting in Helsinki stipulating clear norms for the future behavior of the European states with regard to the Internet. One of the most important items in the codex states that Internet gaming should be directed solely at a country's own citizens, or alternatively only at citizens in countries with whom special international agreements have been entered into. The codex has no international legal standing, but is nevertheless a pronounced expression of the European countries' unanimity as regards the norms for regulating Internet gaming.
As mentioned earlier, the various countries' different gaming policies are starting to collide as the gaming markets begin to overlap each other because of the Internet. In the opinion of the working group, these interstate conflicts can best be solved through negotiation on a common set of gaming regulations under the auspices of for example the OECD or the WTO.
In the light of European-American unanimity that the gaming market should be regulated nationally, the working group believes the development of an international consensus regarding the principle of restricted national markets as being realistic.
The working group shall therefore recommend that Denmark develops an internationally visible Internet gaming strategy with a view to promoting the establishment of a common set of norms in the international community and to contain the globalization of the Danish market that has already taken place and which will undoubtedly accelerate within a few years if the state does not take action against foreign companies illegally providing gaming to Danes via the Internet.
The Internet has placed the state in an awkward position as regards the possibilities to enforce the prohibition on the unlicensed provision of gaming in Denmark. As a result of the Internet, the territory in which the prohibition is to be enforced has potentially become global. This is due to the fact that if an action can be deemed to have an effect in Denmark, it falls within Danish legal jurisdiction. The problem is that it will not usually be possible to enforce the prohibition in the case of gaming providers located abroad. Thus the state will not be able to control the Internet gaming market through the threat of criminal proceedings against illegal provision of gaming.
In acknowledgement of this, the working group has investigated the possibilities for developing alternative control measures. The investigation was based on the observation that the markedly decreasing transaction costs associated with Internet sales and marketing are one of the chief reasons why the Danish market increasingly risks becoming the sales and marketing target of for example Australian gaming companies.
A means of containing the increasing globalization of the gaming market, at least in the short term, could be for the state to increase the transaction costs of the foreign gaming companies who are presently easily able to offer games to Danes.
Based on the above considerations, the next section presents the working group's proposal for a four-element Internet strategy.
Under certain circumstances the state may make it obligatory for private organizations to carry out special supervisory duties to ensure that gaming is not provided via premium rate subscriber numbers. The working group has considered the possibility for introducing a supervisory duty with regard to gaming on the Internet. This could apply to those Danish Internet service providers who allow access to the illegal Internet gaming homepages. The working group recommends adding the illegal provision or promotion of gaming to the list of digital crimes in Denmark.
The key factor as regards the provision of Internet gaming is safe transaction of payments. The payment stage can thus be considered the illegal gaming providers' Achilles heel.
Inspired by the American political debate in the gaming area, the working group has investigated whether it is already technically feasible for the Danish financial sector to block credit card payments by Danes to illegal foreign Internet gaming providers.
The significance of this question lies in the fact that credit card payment's are presently the dominant payment form on the Internet gaming market, being the only global concept for consumer-level payment transactions. What is important for the gaming providers is to find payment solutions suitable for the often rapid games.
Another important precondition for preserving a nationally regulated market is that the Danish gamblers are retained on the Danish market through the provision of regulated Danish games on the Internet. This recommendation should also be seen in the light of the long-term uncertainty of being able to block the payment to illegal gaming homepages. In this connection the working group attaches great importance to the possibilities of the state-controlled companies the public benefit lottery 'Klasselotteriet' (www.klasselotteriet.dk) and the state gaming agency Dansk Tipstjeneste Group (www.tips.dk) to pave the way in the launching of Internet gaming.
In February 2000, Klasselotteriet, the state lottery, became the first state gaming company to launch its lottery on the Internet. The gambler can now order his lottery ticket directly over the Internet. In addition the homepage also provides the possibility to make the payment via PBS.
Dansk Tipstjeneste Group has informed the working group that it has implemented a pilot project on the Internet where some 1,000 persons are invited to participate in one of its games. Thereafter it is planned to launch all of the group's games on the Internet. The time horizon is probably within a year of positive completion of the pilot project.
Dansk Tipstjeneste Group has also stated that it is participating in various working groups concerning the utilization of WAP technology, and a new advanced TV studio has been established on Dansk Tipstjeneste group's premises that will be used in connection with digital TV productions.
Even though Dansk Tipstjeneste Group primarily considers the Internet as a supplement to the existing sales channels via dealers, it will give positive conside-ration to the possibility of developing games specifically designed for the Internet in the longer term.The working group believes that in view of the fact that Dansk Tipstjeneste Group can provide games of all types and has a good image as a safe gaming company that distributes its profit to charitable purposes, it should have good possibilities to move into the Internet market.
A consumer survey on the general attitude of Danish gamblers to the Internet shows that there is presently widespread distrust of foreign Internet gaming providers (ACNielsen AIM, 1999 report). The survey shows that Dansk Tipstjeneste Group is ranked higher on the confidence scale than any foreign firm. The same survey shows that the fact that Dansk Tipstjeneste Group distributes its profit to charitable purposes is one of the reasons why many gamblers choose the group's games.
Fischer & Lorenz believes that from a purely commercial point of view, the optimal marketing strategy on the Internet would be to enter the market as rapidly as possible in order to ensure a dominant position as early as possible. Fischer & Lorenz also considerd that Dansk Tipstjeneste Group has good chances of attracting Danish gamblers on the Internet if the group is given the possibility to take more risks on the market.
From the historical point of view, Dansk Tipstjeneste Group has previously solely had to make as much profit as possible in order to make allocations to the many public benefit activities supported. With the Internet and hence the threat of competition from abroad it becomes just as important that Dansk Tipstjeneste Group demonstrates an ability to retain Danish gamblers through the provision of attractive games with attractive prizes if the company is to continue to be able to allocate large sums to charitable purposes.
The Danish Gaming Providers and the Fear of Pathological Gambling
A negative consequence of gaming providers entering the Internet market is that gambling becomes more widespread in society with the consequent risk that easy access to gaming over the Internet can increase the frequency of pathological gambling. As mentioned earlier, however, the working group believes that prohibition of Internet gaming is neither realistic nor desirable. In contrast, the Danish providers should take the risk of pathological gambling carefully into consideration. A lack of awareness of pathological gambling can lead to criticism that Danish gaming providers help to create new pathological gamblers.
The working group does not believe that it is presently possible to impose special requirements on gaming providers through legislation. The working group justifies this by the fact that the necessary scientific basis does not exist.
The present subdivision of the gaming legislation among several ministries has hitherto hindered the establishment of a specialized administrative unit for the whole of the gaming area. The adoption of a unified regulatory act would enable the gaming authority already established pursuant to Act No. 462 of 31 May 2000 on Gaming Machines Offering Cash Winnings to take over the administration and control of the regulation of Danish gaming. The future central gaming authority's responsibilities with regard to the Internet should include:
As earlier emphasized, one of the working group's clear messages is that active international efforts in the gaming area should be accorded high priority. Gaming can no longer be exclusively considered an aspect of Danish domestic policy. Because of the Internet, gaming should also be an aspect of foreign policy. As mentioned earlier, such an attitude is already expressed in the American Congress, and can be expected to be expressed in a number of countries that see their sovereignty in the gaming area threatened by other countries' policies.
Together with the other European countries and the United States, Denmark should work toward placing the topic on the agenda in the OECD and WTO, perhaps in connection with other negotiations on topics within the economic and financial areas, with the aim of placing pressure on countries who see an economic interest in a global gaming market on the Internet. On the bilateral level, the Ministry of Foreign Affairs should communicate Denmark's attitude to those countries that refrain from hindering their gaming providers from providing gaming to Danish citizens. The reports were submitted to a public hearing following its release.
"However,” explains Peter Sehestedt, head of section in the department of the Ministry of Taxation, "the report has not been debated in parliament. I may add, that it is not custom to debate a government report in parliament. Normally parliament chooses to make the report the topic of a question to the government. However this has not been the case either.
We are at the moment finalizing the work on a new single regulatory act as well as a single act on taxation with regard to the Danish gambling market following the recommendations in the report.The two drafts will be submitted to a public hearing next month. Following the hearing, and depending on whether the prime minister calls for a general election or not, we expect to be able to introduce a bill in the Danish parliament in December. Cross-boarding Internet gambling was a major topic of discussion at a meeting among the Organization for Economic Co-Operation and Development Tax Working Group Party No. 9 on Consumption Taxes. The meeting, which took place April 25-26, was attended by all OECD country members.
The Danish delegation, lead by Peter Sehestedt, used the working party as a platform to bring the development of crossborder Internet gambling and the consequences it will have for the sovereignty of the OECD countries with regard to gambling legislation to the attention of the 30 countries. Sehestedt, head of section, Ministry of Taxation of Denmark, presented his paper, "Gambling over the Internet: An international regulatory challenge with important fiscal implications,” thereby directly criticizing the United Kingdom. He was supported only by the delegation from Ireland. It is important to stress, though, that the other delegations didn't have an opportunity to look at the paper before the meeting. This may also explain why the other Nordic countries, the natural allies of Denmark, didn't say anything at all during the meeting. (They did not send their specialists on gambling nor they did they have he opportunity to discuss the paper with them.) For more information, see noteongamblingdk.doc.
In August, 2001, Denmark's minister of taxes, Frode Sorensen, declared that anyone owning and running a Danish Web site which shows a banner from a foreign bookmaker linking to the site, could run the risk of going to jail and facing charges from the ministry of taxes. One of the Danish newspapers has been charged for posting a link to a foreign bookmaker. The editor is now facing a possible jail term. The news Web site will also lose DKK 100,000 (EUR 13,333) as a result of running the linked ad.
| Tips 12 + Tips 13: | 313 |
| Oddset: | 769 |
| Saturday Lotto | 2,771 |
| Wednesday Lotto | 718 |
| Dusino: | 78 |
| Joker: | 545 |
| Instant Games: | 821 |
| Total Dansk Tipstjeneste | 6,015 |
| Total DanToto (horse race): (July 1-Dec. 31, 2000) |
201 |
| Dansk Tipstjeneste (including Dantoto): | 6,216 |
| Horses and Dogs Race: (Jan. 1-June 30, 2000) |
189 |
| Class Lottery: | 283 |
| ”Class Lottery” (Agriculture): | 71 |
| ”Class Lottery” (Trade): | 71 |
| Humanitarian Lotteries: | 160 |
| Bingo: | 1,000 |
| Foreign Bookmaking*: | 130 |
| Casinos: | 270 |
| Premium Bonds: | 85 |
| Gambling machines: | 2,100 |
| Total other gaming companies: | 4,389 |
| Total gaming market in Denmark: Estimated turnover. |
10,605 |
The amount is calculated on basis of the duty paid to the Treasury. The turnover of each casino is not known.
website: www.klasselotteriet.dk
In Denmark, the oldest lottery is 'Klasselotteriet' established in the 18th century. Besides, there are two smaller lotteries, 'Varelotteriet' and 'Landbrugs-lotteriet.' These lotteries were entirely or partly run by state management, however, a few years ago 'Klasselotteriet' was given the same constitution as Dansk Tipstjeneste.
The annual turnover of 2000 was for Klasselotteriet DKK 283 million and for the two smaller lotteries each DKK 71 million. The profit of 'Klasselotteriet' goes to the Treasury, while the profits of the two others go to agricultural and trade purposes. Klasselotteriet's new Web site has been developed by the CSC Consulting Group Denmark. The site allows users to check their winnings and to buy new lottery tickets. In time, the functionality should be expanded to include WAP technology.
The Danish Pools and Lotto Company Ltd.
Website: www.tips.dk
On-line Vendor: GTech
Internet Gaming System: UWin
Instant Ticket Vendor: Oberthur
Games Offered: Instants, Sports bets, Lotto, Numbers games, Casino gaming, Offtrack bookmaking, Bingo hall bingo.
Beneficiaries: Arts and culture, Education, National treasury, Other Sports.
Jurisdiction: Denmark (incl. Greenland & Faroe Islands)
Dansk Tipstjeneste is a limited liability company with a share capital of DKK 500,000 and was established in 1948 according to legislation and under the jurisdiction of the Ministry of Taxation. The state owns 80 percent of the shares of the company company (10% held by the Danish Sports Federation and 10% held by the Danish Gymnastics and Sports associations) and has five of 15 representatives at the Board of Directors. Another five Board members come from sports organizations, whilst the remaining five are staff representatives.
According to the legislation adopted by the Parliament in 1992, expansion of the game assortment of Dansk Tipstjeneste can take place following board decisions (however, Dansk Tipstjeneste is not allowed to establish casino games).
In 2000 Dansk Tipstjeneste became a group comprising Dansk Tipstjeneste AS, DanToto A/S and Dansk Automatspil A/S. Since Dansk Tipstjeneste took over DanToto A/S all betting on horse and dog races is handled by Dansk Tipstjeneste. The influence of the ministry of taxation primarily takes place through its representation at the board of directors, whilst the ministry, with the exception of certain control procedures, exercises no influence on the daily running of the company, its financial transactions, etc. In May,2000, the Danish Parliament passed an act on gaming machines offering cash winnings. The act came into force on Jan. 1, 2001. One of the consequences of the new act is that Dansk Tipstjeneste, through a subsidiary, can establish arcades in open competition with other market players.
Full-time employees: 211
Part-time employees: 71
In the financial year 2000, turnover (including horse race) amounted, record breaking, to DKK 6,216 million (6.7 percent increase compared with 1999: DKK 380 million), with a revenue of DKK 945 million directly to the Treasury. On top of this revenue a large number of sports, cultural and youth purposes receive subsidies from the profit of Dansk Tipstjeneste. Purposes which, to some extent, otherwise had to be financed directly by the state. In 2000, these purposes received a grandtotal of DKK 1.452 million. The financial highlights 2001 shows that the Dansk Tipstjeneste Group generated revenues of DKK 6,569 million, a new record. After the payment of state duties of DKK 964 million and payment of DKK 95 million to the Financing Fund for Horse Racing, the Group realised a profit for the year of DKK 1,311 million. The "contribution” to Danish society from the Group's activities is calculated at DKK 2,393 million for the 2001 financial year.
The increasing revenues is primarily attributed to the fact that the Group, through its subsidiary DanToto A/S, which was formed in 2000, has included revenues from betting on horse races for the entire financial year: Dansk Tipstjeneste A/S took over the horse race betting activities on July 1st, 2000.
Also contributing to the growth in revenues was the new game machine concept 'Pit-Stop', which combines a gaming café environment and game machines, and 'Pitten,' which comprises only game machines. This new business area was established in the subsidiary Dansk Automatspil A/S in conformity with the Danish Parliament's passing of an act on gaming machines offering cash winnings, which came into force on January 1st, 2001.
Full-time employees (avg.)*: 227 (203)
Part-time employees (avg.)*: 50 (69)
* Figures include government control employees .
Number of retailers 3,845 (3,886), including Online retailers: 2,722 (2,704).
At present, Dansk Tipstjeneste operates the following games:
According to an article published by 'Europemedia' Dansk Tipstjeneste in april 2002, which has been Denmark's betting monopoly for more than 50 years, is coming under pressure from foreign internet gaming sites. The news service said that this competition from international companies has forced Dansk Tipstjeneste to diversify its operations.
Companies like British www.Ladbrokes.com are gunning for a share of the E800m that Danes spent last year with Dansk Tipstjeneste. Ladbrokes expect to reach E20m this year across Scandinavia.
In Denmark, foreign companies are forbidden from offering games, but Danes are allowed to use their money there. It is also illegal to be an intermediary. That's why Dansk Tipstjeneste and Danish tax authorities have been busy hunting down websites and other media with ads from foreign gaming companies.
Meanwhile, the companies have established Danish sites of their own and all the fuss has served to give them some good publicity. The loser may well be the sports clubs and associations that received nearly E200m in 2001 from Dansk Tipstjeneste. The foreign companies are not subject to Danish legislation and therefore not obliged to support the clubs.
If Dansk Tipstjeneste fails to defend its market share, legislators will have to consider breaking up the monopoly to give the clubs and associations depending on the income the option of making other arrangements.
GTECH has been providing on-line lottery equipment and services for Dansk Tipstjeneste A/S since 1989.
On the 2nd of November 1999 Dansk Tipstjeneste A/S signed a five-year agreement with UWin!, GTECH's wholly owned Internet wagering subsidiary, for the UWin!'s proprietary Internet lottery gaming system and project management. UWin!'s compensation is based, in part, on sales volumes which cannot be pre-determined.
UWin!'s proprietary gaming system provided Dansk Tipstjeneste A/S with a core of Internet-based lottery games. UWin! also provided the necessary electronic commerce solutions to purchase games online. Play is restricted to players within Denmark using UWin!'s proprietary GateKeeper(TM) technology.
Secure Transaction Processing Over UWin!'s Private Extranet.
To ensure that the Internet-based games are as secure and easily regulated as existing lottery games, UWin!'s GateKeeper(TM) high-security network platform serves as the foundation for Internet wagering. GateKeeper restricts consumer access to a defined set of registered players in a particular jurisdiction and enables authorized lottery jurisdictions to offer interactive lottery games to home PC users. By using a private Extranet rather than the Internet as the backbone for cross -jurisdictional transactions, UWin! provides the security and regulatory controls that lotteries demand.
Authorized Play That Adheres to Local Regulations
To ensure that the Internet-based games are as easily regulated as existing lottery games, UWin's! proprietary, built-in safeguards and controls, combined with local regulatory measures, allow only those games authorized by local gaming regulations while prohibiting unauthorized play across jurisdictional boundaries. UWin!'s GateKeeper platform also enables lotteries to offer cross -jurisdictional and multijurisdictional games, where authorized by regulatory authorities.
Fun New Interactive Games for New Lottery Players
UWin!'s offering includes interactive and multi-player games that provide the fresh, fun and non-traditional gaming experiences that Internet lottery players demand. In order to enhance game play and maintain player interest, UWin! provides non-gaming and community features, such as games for fun, chat rooms and news. These features are common in non-wagering Internet games and are not typically offered by other authorized lottery organizations on the Internet today.
Earlier that year, in January 1999 Dansk Tipstjeneste A/S signed another agreement with GTECH to replace the Lottery's existing terminals with approximately 2,190 new terminals and to continue providing the Lottery with terminal maintenance under a previously announced service contract that runs through September 1, 2003.
The game was introduced in Denmark in October 1989 and is played every Saturday. The formula is seven of 36 with two bonus numbers, and there are five prize categories: For seven correct numbers, six correct plus one bonus number, six correct numbers, five correct numbers, and four correct numbers. 45 percent of the stake goes to the players as winnings. After deduction of costs, duties, etc., the profit primarily goestosports purposes, but also humanitarian and cultural purposes get their share. The pay-back rate (45 percent) as well as the distribution of profits is the same for all of Dansk Tipstjeneste's games. The turnover of the year 2000 amounted to DKK 2,771 million.
Parallel with the ordinary Lotto game, Dansk Tipstjeneste is one of the six companies behind Viking Lotto, a Wednesday Lotto game started in March 1993.The formula is six of 48 with two bonus numbers, and there are five prize categories:
The fact that prize money for the first prize is pooled from Estonia, Iceland, Finland, Norway, Sweden and Denmark makes Viking Lotto the first regular pan-European joint venture in the gaming business. The turnover for the year 2000 was DKK 718 million. For more information on the Viking Lotto see the Viking Lotto File.
In August 1997, Dusino was launched. Dusino is a Lotto-like game developed in cooperation with the Danish television channel DR1, and the draw is broadcast each Sunday afternoon in DR1. The formula is 12 out of the figures 1-24 in the same field of a board. There are four prize ranks: For 12, 11, 10 and nine correct numbers. The turnover for 2000 was DKK 78 million.
Joker was launched in January 2000. It is an additional game bought together with Lotto, Viking Lotto, Dusino, Tips 12 or Tips 13. The formula is two Joker numbers including each seven figures. There are six prize ranks: seven, six, five, four, three, and two figures in the right succession. The turnover for 2000 was DKK 545 million.
The football pools are the oldest of Dansk Tipstjeneste's games. It started in 1949 and is also played weekly (Saturday). The total turnover of 2000 was DKK 224 million. There are four prize categories:
This game was launched in August 1998 and is also played weekly (on Sundays). There are four prize categories, i.e. 12, 11, 10, and nine correct forecasts, and the turnover for 2000 was DKK 78 million.
Oddset was introduced in April 1994 and consists of four games: 'Den Lange' (The Long List), 'Matchen' (The Match), 'Vinderen' (The Winner) and 'Resultatet' (The Result). The turnover for 2000 was DKK 769 million. A new sports game named "Måljagt” was launched in 2001. Måljagt is the first game introduced by Dansk Tipstjeneste that offers odds adjusted on an ongoing basis. The declining trend in sports games continued in 2001, and the business area now accounts for 17.6% of Dansk Tipstjeneste's revenue and 16.1 of Group revenues.
The first instant lottery, 'Quick,' was introduced in September 1992. The instant product range now includes Quick, MiniQuick, Bogstavjagt, Stifinder and various event games. The total turnover for 2000 was DKK 821 million. In 2001 the scratch card business accounted for 13.4% of Dansk Tipstjeneste's revenue and 12.2% of Group Revenues.
On July 1, 2000, Dansk Tipstjeneste took over the Danish horse race company DanToto, which then became a subsidiary company to Dansk Tipstjeneste. The turnover of the 6 months amounted to DKK 201 million. In 2001 betting on horse races in DanToto developed favourably, with total revenues posting a 12.8% increase over 2000. This positive trend in revenues was attributable to the fact that 2001 was the first year in which games were available every week for horse racing in Jägersro in Sweden, and from April 2001, Danish players were able to bet on the V75 games, Sweden's large horse race games. DanToto accounts for 6.7% of the Group's revenues (DKK 440 million).
Future
From January 1, 2001, Dansk Tipstjeneste has got the permission to run gambling machines on the same terms as other suppliers and opened a number of gaming venues in 2001 and 2002.
Dansk Tipstjeneste has developed a concept for a gaming cafe with a gambling hall combined with a section for gaming machines. The new game shop concept, which has been named 'PitStop,' focuses on creating a special environment for the players to enhance sports games and horse racing in particular.
In July 2002 Dansk Tipstjeneste A/S entered into a contract with Australia's Structured Data Systems (SDS) to extend the SDS Trackside T animated racing game to over 50 PitStop cafés and other outlets throughout Denmark in 2002 and 2003 years.
Dansk Tipstjeneste opened the first PitStop gaming café in Copenhagen's Fisketorvet (Fish Square) shopping mall in March 2001, and Trackside was an original component of the new concept. Following its initial success at Fisketorvet, the game was soon installed as an expanded test in a further six franchise outlets.
In the course of the year 2002 the subsidiary's activities were gradually expanded in 10 PitStop cafés and 22 Pitten arcades, offering in total of nearly 900 amusement with prizes machines. Dansk Automatspil has exceeded the expectations, with the subsidiary's revenue accounting for 2.2 % of Group revenues (DKK 200 million).
"Trackside quickly became a popular activity in these cafés, which is why we now want to extend it to other outlets. SDS has already upgraded the central computer and networking capability to support this expansion, and we will commence the rollout of new venue installations later this year,” said Jean Jørgensen, Senior Vice President of Dansk Tipstjeneste.
Trackside is a new online game, which shows realistic representations of racing thoroughbreds, trotters or greyhounds on TV screens. It can be run across hundreds of venues, where players may purchase tickets at fixed odds in races run every few minutes. The game was developed in Australia, and is extensively deployed there in pubs, clubs and OTBs by SDS parent company Tabcorp.
"One of the key reasons for Trackside's success is that it is a social game,” said Greg Duggan, SDS Business Development Manager for International Lotteries. "People can enjoy playing while having a cup of coffee or a beer with their friends. It appeals to both punters and Keno players, yet is much more exciting than Keno and easier than real racing. Trackside appeals to new and younger players, and to a higher proportion of women players, than the more traditional products.”
Following its success in Australia and Denmark, SDS is now offering this game to lotteries in Europe and North America. In the USA and Canada Trackside is branded Racetrax T , and it was shown at both NASPL '02 Baltimore in October and WLA 2002 Adelaide in November.
"In a market characterized by intensified competition and increased customer expectations, lotteries will find it increasingly important to be at the forefront of trends in the industry”, observed Jørgensen. "The PitStop cafés and Trackside are some of the ways that Dansk Tipstjeneste is achieving that objective.”
In September 2001 Icelandic Betware and Dansk Tipstjeneste have signed a contract wherein it is agreed upon that Dansk Tipstjeneste will use Betware's Interactive Gaming System and purchase professional services regarding the setup and maintenance of the Interactive Gaming Center from Betware. The contract is valid for at least five years. By offering Interactive gaming solutions, Dansk Tipstjeneste's goal is to strengthen its competitive power and offer an alternative solution to its current 'On-Line' setup, which in turn will lead to an increase in the total gaming revenue. By offering Interactive solutions, Dansk Tipstjeneste wants to meet the players needs, demands and expectations of the Internet. It is then Dansk Tipstjeneste's intent to develop and introduce new interactive games to meet the market and market trends.
2001
The sales figures for the first half of 2001 for the main categories of Dansk Tipstjeneste games:
| DKK | |
| Lotto games: | 1,682,660,456 |
| Number games: | 296,482,910 |
| Sports games: | 510,615,309 |
| Instant games: | 375,143,290 |
| Total: | 2,864,901,965 |
| Horse Racing: | 211,934,000 |
| Dansk Tipstj. Group: | 3,076,835,965 |
Revenues from the Group's games amounted to DKK 1,227 per capita in Denmark
Memberships
Dansk Tipstjeneste is active member of the World Lottery Association (WLA; www.world-lotteries.org) and the European State Lottery and Toto Association (ESLTA; www.european-lotteries.org).
Casinos were established in Denmark in 1991. Calculated on the difference between the stake amount and the prize amount, the casinos the first three years paid 65 percent duty to the state. In 1994, the duty was made progressive, i.e. the casinos now pay 45 percent of gross revenues up to DKK 4 million, and 75 percent of revenues exceeding DKK 4 million. The total gross revenue before duty amounted in 2000 to about DKK 300 million (the number of casinos being six).
Website: www.bet24.com
Bet24 is a new Internet betting company, operating from the UK, that utilizes the potential of the PC and the Internet for gambling on sports primarily football. Bet24 is founded by Holger Kristiansen. Kristiansen is no novice in the betting and football trade. He was the man behind the Oddset concept introduced by the Danish pool services in 1994-a betting concept that had a turnover of 769 million kr. in 2000 (approx. 100 million US$). For five years Kristiansen was responsible for amongst other things defining odds for the pools service. In 1999 he created the football Internet site bold.dk that has manifested itself in its first year as the preferred online football magazine for Danish football enthusiasts.
In September 2000 he resigned at bold.dk and the following month opened up Bet24. Site languages are: Danish, Swedish, Norwegian, Finnish, English, German and French.The number of employees in odds and administration (in Central London) is eight. The chief odds compiler in London is one of Holger Kristiansen's old odds compilers from when he was in charge at Dansk Tipstjeneste: Mikkel Petersen.
Holger Kristiansen said, "We have outsourced all our IT to the Icelandic company, Parspro. Parspro is driven by Sigurdur Baldursson, who, as myself, for 10 years was in the state-owned betting business. Sigurdur was the managing director of the Icelandic 'Tipstjeneste,' Getraunir, which were the first state owned company selling on the Internet.
”Bet24 believes that our product-developments (increasing odds, superior system bets and what will follow) combined with our knowledge on the different local betting markets and many years experience in this business will give us an unique position on the internet sportsbetting market. We will try to attract the 'combination punters' and let all the rest fight for the 'single punters.' Every week we increase our number of customers with 10 percent. Although we, at this point, are biggest in Denmark, we of course have international strategies and plans. We are currently having customers in 44 different countries. Our plan is to take one country at a time; next in line are countries as Norway, Sweden, Germany and Finland.
Of course our biggest advantage towards the monopolists is our higher odds. When a year is through we should ideally have paid out 82 percent to the customers while Dansk Tipstjeneste's aim is 52-55 percent. But being in a market where things and especially the IT are changing very fast, it is a big advantage to have a small and flexible organization. To get a decision through the state owned companies can literally take years.";
Casino on Net (www.casino-on-net.com) Casino on Net is one of the leading online casinos on the Internet, with over 500,000 downloads since its launch in 1996. Website languages: French, Italian, Spanish, German, Danish, Chinese, Japanese and Korean. Casino on Net is operated by Cassava Enterprises LTD, a registered com-pany which is located in Antigua. Casino on Net operates under a license granted by the government of Antigua, and is regulated bythe Antigua Gaming Board.
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According to Bet24's Holger Kristiansen, the competition in the field of sportsbetting is complex: "My guess (can only be a guess) is that the sales of sportsbetting to Danish customers is close to 1 billion Danish kroners. As Dansk Tipstjeneste's sales are 769 millions (2000), you can see that I believe nearly 25 percent of this market is at the moment is going to Internet betting companies, as Bet24.
"We are probably one of the biggest Internet betting companies in the Danish market, as we are the only company driven by Danish people. But companies like Centrebet (Australian), Playit (Norwegian), Expekt (Swedish), Unibet (Swedish) and Betandwin (Austrian) also holds a position on the Danish sportsbetting market. And this market will increase, we very strongly believe. ”We are not so sure that customers are willing to pay the prize (poor odds) in order to give the profit to different organizations. I believe that it's correct that you need to have confidence in your Internet bookmaker but I believe that having the right economic set-up and having 'a face' in local market is sufficient to get thatconfidence. But the 'real test' of course 'remains to be shown'.”
Faroe
The Faroe Islands has gambling regulations similar to those of Denmark even though they have an independent jurisdiction. At this moment a working group started preparations in order to renovate the national games and the regulations. The working group will probably also come upwith suggestions for how to regulate Internet gambling. The existing games in Faroe are: