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• Governing law

  Name	Law or Code?
  The Danish Marketing Practices Act	Law
  The Danish Gambling Act	Law
  The Danish Gambling Duty Act	Law

  Last modified 14 Jan 2019

• Extra-territoriality

  The Danish Gambling Act generally applies to all games that are offered or arranged in Denmark. However, games that are solely based on skills are not governed by the Act.

  Online games are offered in Denmark if the game provider receives stakes (i.e. payment) from persons in Denmark. This means that a game provider must comply with the Danish Gambling Act even if the game provider is not situated in Denmark as long as the game provider receives stakes from persons in Denmark.

  According to the Danish Gambling Act games that involve payment of stakes require a license from the Danish Gambling Authority, unless specifically exempt.

  Note: Providing gambling services without a Danish gambling license is illegal and may lead to criminal proceedings. 

  If a prize promotion is linked to the purchase of certain goods or a service, the payment for that good or service is not considered a stake, if the value of the good or service equals the price paid for the good or service. However, if participation in a prize promotion requires payment of an extra amount besides what is already paid for the good or service, that amount is considered payment of a stake. Likewise, if the price of the good or service is higher than the usual price to finance a prize promotion.

  The Danish Marketing Practices Act follows the so-called effect principle meaning that it applies to all prize promotions targeting the Danish market. The Danish Marketing Practices Act thus applies even if the promoter is not based in Denmark.

  Last modified 14 Jan 2019

• Skills competitions

  Yes, a prize promotion based on skill can be run. If the prize promotion is purely based on skill it is not covered by the Danish Gambling Act. However, it must be ensured that:

  • the terms and conditions for the competition are clearly stated. See the Other Local Requirements section; and
    
    
  • the winner of the competition is selected via the criteria stated in the terms and conditions.

  Note: If a skill based competition e.g. a sporting event contains elements of chance, the competition is characterised as a combination game, and is thus not considered a pure skills competition. As a result, the competition will be covered by the Danish Gambling Act and a license from the Danish Gambling Authority must be obtained if the competition requires payment of a stake.   

  Note: It is by law considered unfair commercial practices if a consumer is given the impression that it has won, will win or by conducting a certain action will win a prize that either does not exist or includes the payment of an amount of money or other expenses.   

  Last modified 14 Jan 2019

• Prize draws

  Yes, a prize promotion can be run, where there is an element of chance in the selection of the winners. However, see the other local requirements section. 

  Note: If the prize promotion entails payment of a stake, a license is required, otherwise it will potentially be deemed an illegal lottery. In Denmark lotteries are subject to monopolisation. However, permission can be given if a lottery is held with beneficial purposes or for other non-profit purposes.  

  Payment of a stake includes payments for goods and/or services, where the prices have been inflated to pay for the participation in the prize promotion. If, however, the price of the good and/or service corresponds with the value of the good or the service, the payment will not be considered a stake.

  Last modified 14 Jan 2019

• Selection of winners

  The selection of winners is not regulated as such. However, the winners of a competition must always be chosen in accordance with the criteria listed when the consumer entered the competition.

  Note: The terms and conditions of the prize promotion must unveil clearly and unambiguously how the winner is selected, the date on which the winner is selected, where and when the name of the winner is published and the conditions for delivery/pick up of the prize.

  Last modified 14 Jan 2019

• Judges

  No.

  Last modified 14 Jan 2019

• Prizes

  Certain prizes such as guns, explosives, dangerous chemicals and the like will most likely be considered contrary to good marketing practice.

  The prize itself must also actually exist. It is considered a misleading commercial practice if a prize competition is held, but the prizes promoted or other reasonable equivalents are in fact not available.

  Last modified 14 Jan 2019

• Registration requirements and fees

  Registration Requirements

  Generally, companies must register their game activities with the Danish tax authorities, if the game involves the payment of duties.

  Note: Prize promotions which are:
  
  - Without stakes
  - Based on chance
  - Available to the public
  
  and which only offers prizes with a value of US$30 or less do not require registration.

  Fees/Taxes payable

  The tax consequences must always be considered and specialist advice should be sought. 

  In terms of payable taxes, payable taxes depend on whether the prize promotion is based on skill or chance.

  Where winning the prize is based on skill, the prize is considered income for the winner and the winner must pay income taxes.

  Where winning the prize is based on chance and where the prize promotion is without stakes and available to the public the prize is not considered an income for the winner, and as such the prize does not result in income tax for the winner. The promoter is, however, obliged to pay a gain duty. 

  Note: If the prize consists of the company's own products, the duty is calculated based on the sales value.  

  Where winning the prize is based on a combination of chance and skill and where the prize promotion is with stakes the prize is also subject to a gain duty, and such duty must be paid by the person holding the license.

  Last modified 14 Jan 2019

• Other local requirements

  The marketing of prize promotions is subject to quite strict rules. As such the terms and conditions for the prize promotions must generally be clear, unambiguous and easily accessible for the consumer. 

  The consumer must receive all necessary significant information to be able to assess the value of the prize promotion.

  The marketing materials for a prize competition must include the following information:

  1. Limitations based on age or geography;
     
     
  2. The value of the prize;
     
     
  3. The chances of winning, if such chances can be determined;
     
     
  4. How many prizes that are included in the competition;
     
     
  5. The selection process (i.e. how the winner is selected);
     
     
  6. The date on which the winner is selected;
     
     
  7. Where and when the name of the winner will be published;
     
     
  8. Conditions for delivery or pick up of the prize;
     
     
  9. The period of limitation. 

  Note: When prize promotions are marketed towards kids and youths the requirements are intensified. Special attention must be put into ensuring that the kids and youths understand not only the terms and conditions of the prize promotion, but also that the prize promotion is part of the company's marketing.  

  Prize promotions on social media are in general subject to the same conditions as mentioned above.

  A consumer can only by contacted by phone, e-mail or text if the consumer has given his/her clear consent hereto. Promoters are allowed to use prize promotions to achieve such a consent. However, where this is an intention, the consumer must be clearly informed hereof before the consumer provides his/her contact information. Further the consumer must actively choose to give the consent (i.e. consent hidden in the term and conditions or the data policy is not allowed).

  Note: Children cannot give consent to be contacted. Such consent can only be given by the child's parents.

  Last modified 14 Jan 2019

• Timing

  If the company is subject to a license or payment of duties time must be allowed in order to ensure compliance with local Danish law.

  Last modified 14 Jan 2019

• Translations

  Translation is not required by law, but terms and conditions for participation in the prize promotion must be clear, unambiguous and easily accessible. We therefore highly recommend that the terms and conditions are in Danish or English.

  Last modified 14 Jan 2019

• Penalties for non-compliance

  Non-compliance with specific sections in the Danish Marketing Practices Act is punishable by a fine. When deciding on the penalty, emphasis is placed on the gravity, extent and the intended economic gain of the infringement.

  Non-compliance with the Danish Marketing Practices Act can further result in an injunction from either the Danish Courts or in some cases the Danish Consumer Ombudsman. Non-compliance with such an injunction is punishable by a fine or a prison term of up to 4 months. Non-compliance can also lead to the payment of damages.

  In cases where a prize promotion amounts to a lottery, a combination game or gambling a number of different criminal sanctions apply, e.g., non-compliance with the Danish Gambling Act by intentional or grossly negligent arrangement of games without a license is punishable by a fine or a prison term of up to 6 months. However, for repeated non-compliances or non-compliances of particularly extensive character the punishment is a prison term of up to 1 year. The Danish Gambling Act further sanctions the promotion of games that do not have the required license.

  Non-compliance with tax legislation may result in fines and criminal liability.

  Finally, there is the possibility that the personal data processing aspects of the promotion could breach GDPR, which has maximum fines of up to the higher of (i) €20 million, or (ii) 4% of the promoter’s worldwide annual revenue.

  Last modified 14 Jan 2019

• Restrictiveness of regulations

  The rules relating to prize promotions are not very extensive if no stake is paid for participation in the prize promotion. However, prize promotions do have a formal requirement of registration (see above in the Registration Requirements section) and quite strict requirements in regard to marketing towards consumers. Also, GDPR has introduced various obligations around processing personal data which have significant application to prize promotions (eg. use of submissions including personal data, winner publicity, etc.).

  Last modified 14 Jan 2019

• Regularity of sanctions

  The regulators of the Danish Marketing Practices Act, the Danish Gambling Act and the Danish tax laws can potentially impose fines. Prison sentences are very rarely imposed.

  Last modified 14 Jan 2019

• Key contacts
  

  Niels Ankerstjerne Sloth

  Partner DLA Piper Denmark [email protected] T +45 33 34 08 17

  

  Annemette Ellerman

  Partner DLA Piper Denmark [email protected] T +45 33 34 04 37