The European Court of Justice (ECJ) has ruled that the differentiated tax regime for online gambling in Denmark is compliant with EU State aid rules, in a decision that will be welcomed by authorities in the Netherlands who are proposing a similar tax regime to regulate the sector next year.

The European Commission had previously opened an in-depth formal investigation into Denmark’s gambling legislation after receiving complaints from the Danish Slot Machine Association and a land-based casino alleging the planned measure violated EU state aid.

The EC concluded in a decision in September 2011 that the proposed lower taxes for online casinos compared to traditional land-based casinos was in line with EU state aid rules. That decision was challenged by the applicants, leading to this latest ruling by the ECJ on Friday.

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