Version September This is a translated document. The Danish version of the document is the only applicable and authentic version.

Transcription

1 1 Contents 1 Contents Foreword Practical information What do the guidelines comprise? Games for which a licence may be obtained Games for which a licence cannot be obtained Games that may be operated without any licence Who must apply? Subcontractors White labels Affiliates Application Requirements to be met by applicants Requirements on individuals Requirements on companies Requirements on members of the executive and the board of directors Applicants who are resident or established outside EU or EEA countries Requirements for appropriate professional and financial operation Appropriate financial operation Appropriate professional operation Control of gambling data, etc

2 8.2.2 Link-up to SAFE and ROFUS Requirements for your gambling system Registration of customers (players) Politically exposed persons residing in another country The players' gambling accounts Information to the players The players' possibility of limiting gambling Requirements which only apply to betting licences Issuing licences The restricted revenue licence Making changes to a licence Application concerning other games than those mentioned in the licence Transferring a licence Other changes Further requirements in connection with the provision of gambling services The marketing of games Complaints from players Suspension of a gambling account Selling land-based betting services Annual fee Lapse of licences Withdrawal of a licence Complaints about decisions made by the Gambling Authority... 51

3 2 Foreword These guidelines are intended for citizens and companies who are interested in providing betting and online casino services in Denmark under the Gambling Act (Act No. 848 of 1 July 2010 on Gambling and Act No. 223 of 22 March 2011 for Greenland on Certain Games as later amended) and the associated statutory instruments. On 22 September 2011, the Gambling Authority published a number of forms, whereupon it is possible to apply for a licence. When publishing the forms, the Authority pointed out that all applications received by 17 October 2011 at noon will give the applicants the possibility of being on the market as from 1 January An application may be submitted in stages if only the complete material has been received in duly filled-in condition before the closing date for application, meaning that it is possible in the process, for instance, to Submit the application form itself without enclosing Appendix A and/or Appendix B; Submit the application form itself filled in only partly; Submit the application form itself plus Appendix A and/or Appendix B. This approach is recommended in particular, if parts of the application material is actually ready for review by the Gambling Authority before 17 October, or if an applicant is in doubt as to whether the application form and/or Appendix A or B have been correctly completed. This will ensure better opportunities for the Gambling Authority to engage in dialogue with the applicant about the application material and to get any questions of doubt etc. eliminated, which will allow the applicant to keep within the time limit for application. If the application material is submitted in stages, each submission must be accompanied by a statement indicating the part of the application which is covered by the submitted documents and the parts of the application which will thus still be outstanding. If an applicant feels in doubt as to whether certain enclosures are adequate, this must also be indicated in the statement. Applicants must always pay the full application fee before the Gambling Authority assesses the full application or parts of it. In exceptional circumstances the Gambling Authority may grant an exemption from the time limit and continue to work towards ensuring that applicants will be on the market as from 1 January 2012 if it is estimated, on the basis of a specific assessment, that later submission of minor parts of the application

4 material will not lead to a greater workload and thus interfere with the assessment of the applications that were received in full before the time limit expired. In cases in which enclosures have been submitted while the Gambling Authority finds that they are not fully adequate, additional submission will, in principle, not prevent the applicant from being on the market as from 1 January 2012, provided that these enclosures reach the Gambling Authority within a short time particularly if the applicant has himself called attention to his being in doubt about whether an enclosure is adequate. These guidelines are dynamic and the Gambling Authority is working on improving them continuously. Thus, they will be updated and further specified on relevant points on an ongoing basis. 3 Practical information The Guidelines describe the most important rules for citizens and companies who wish to provide betting and online casino services. The regulatory basis is the gambling acts (the Act on Gambling and the Act for Greenland on Certain Games) as well as the following executive orders: The Executive Order on Online Casino Services The Executive Order on Providing Online Betting Services The Executive Order on Land-based Betting. The Gambling Authority is the body that issues licences, collects fees and is charged with controlling and supervising the area. Restricted revenue operating licences are not subject to the Executive Orders referred to above. However, the Gambling Authority may specify certain terms. SKAT (the Danish tax authority) is responsible for registering licence holders and collecting, controlling and recovering duties. Gambling for money is exempt from VAT. Gambling operators who provide gambling for money must pay payroll tax according to section 1(1) of the Payroll Tax Act. Further questions about VAT and payroll tax may be addressed to SKAT. For further information please refer to You may find further information at the Gambling Authority s site, where you may also find forms and other material to be used in a possible application. If you have any questions, you should not hesitate to contact the Gambling Authority at [email protected] or

5 telephone What do the guidelines comprise? The Gambling Authority may grant licences for betting and online casino services. Some games may be provided without any licence, even if they may be online casino games, for example, while it is not possible to get a licence for other games even if they are betting or online casino games. This section gives a brief review of the rules. 4.1 Games for which a licence may be obtained Betting Betting comprises games in which the participants enter their bets for the outcome of an event, such as Oddset and manager games. The concept comprises more than just betting on sports events. For instance, betting on what name a new member of the royal family will be given is also a betting game. Betting may be divided into two categories: Fastodds betting such as Oddset where the player bets directly against the provider of the bet and knows his possible winnings in advance. The definition also comprises betting exchanges. Pool betting such as manager games where the whole gain or part of it is determined by the size of the pool or is divided between the winners. A licence to provide betting services covers both online and land-based selling of bets. Online betting is when the player and the operator do not meet physically, for instance where bets are sold via the internet, telephone or television. Operators are not allowed to offer betting on sports events reserved for young persons under 18. A betting licence also comprises land-based betting on the results of electronically simulated sports events. Betting services may exclusively be provided based on a licence from the Gambling Authority. Online casino Online gambling services are those where the player and operator do not meet physically, for instance where games are sold via the internet, telephone or television.

6 Online casino games include roulette, black jack, baccarat, punto banco, poker and gambling on gaming machines offering cash winnings, i.e. games that are now typically offered by the land-based casinos as well. The concept of online casino defined in the Gambling Act is broader than the games offered in landbased casinos because it also comprises so-called combination games, which are games in which the outcome is determined by a combination of chance and skill. Games that are determined totally by chance such as lotteries, bingo and the like are not comprised and, similarly, games that are determined by skill exclusively are not comprised either. Skills games are games like chess, for example. If a game includes both chance and skill, it will be covered by the online casino concept. Examples are backgammon, whist and quizzes. A quiz in which those who have answered a question correctly take part in a draw of lots is therefore an online casino game. Online casino games may only be provided subject to a licence from the Gambling Authority. 4.2 Games for which a licence cannot be obtained You cannot apply for a licence to operate a general lottery or a class lottery. A lottery is a game like: bingo scratch cards drawing lots These games may only be operated by companies with special permission. Permits been granted to Danske Spil A/S and Det Danske Klasselotteri A/S, for instance. It is, however, possible to apply for a permit for a land-based offering of a charitable lottery, i.e. a lottery to fund either a charitable cause or other benevolent objectives. To read more about it, refer to Lottery. About betting in particular Holders of a betting licence may not provide gambling on: horse and dog races pigeon racing results of lotteries other randomly created events. Danske Spil A/S may, however, offer betting on horses and dogs.

7 4.3 Games that may be operated without any licence Betting and online casino games are only subject to gambling legislation in case the players: Pay stakes or entry fees (money or similar), and Upon payment of their stakes or entry fees have the chance of winning a prize (all types of prizes). If none or only one of the conditions is met, you may operate the game without any licence from the Gambling Authority. Pure skills games may be offered without any licence even if they fulfil the conditions referred to above. To read more, refer to section 4.1 under Online casino. What is a stake? Stakes will typically be money paid by a player for taking part in a game. Membership fees and the like may also serve as stakes if a surcharge must be paid for taking part in the game. What is a prize? A prize may be money, goods or other benefits of financial value. There must not necessarily be any correlation between a player s stakes and the prize players may win. A sponsored prize will therefore also be a prize. 5 Who must apply? The Gambling Act sets out the requirements that an individual or company must meet to obtain a licence to offer gambling services, but it does not contain a precise definition specifying what a licence holder is. Obligations, responsibility and rights Basically, all individuals and companies offering betting and/or online casino services must hold a licence. If a gambling operator has decided, in reality, to offer the various games comprised by one brand from several different companies, all the companies must in principle hold a licence. The licence holder is responsible for ensuring that the operation of the games offered complies with Danish legislation. The licence holder s rights and obligations include the following: 1. Responsibility, risk and managerial prerogative relating to the operation of games. 2. Contracting with players. 3. Ownership of player data, including registration of players. 4. Player support.

8 5. Ownership of intellectual property rights relating to games. 6. Ownership of website/game client. 7. Operating the gambling system, including maintenance of hardware. 8. Owner or renter of the greater part of the gambling system (gambling infrastructure). 9. Control of colluding etc., money laundering and combat of the financing of terrorism. 10. Payment transfer services and underpinning of payment instruments. 11. Marketing of trademarks and/or games. 5.1 Subcontractors A licence holder may use subcontractors for some of the tasks referred to above. The number of tasks that may be handled by subcontractors will depend on a specific assessment. However, in principle, the greater part of the services must be provided by the licence holder. The use of subcontractors is not contrary to the prohibition against delegating rights as set out in section 11.2 as long as it involves a minor part of the operation. The licence holder must keep in mind that using subcontractors will not allow the licence holder to disclaim liability vis-a-vis the regulators for the work that is not carried out by the licence holder himself. Subcontractors may not be entrusted with performing the work set out in items 1 and 3. A subcontractor may not be a white label buyer from a gambling operator if it provides services to that operator. Network platforms Network platforms are platforms used for games in which players play against each other (peer-to-peer games) and where exclusively such games are facilitated. Customers are redirected via the licence holder to a network platform, on which the customer may take part in games against or with players from other gambling operators and other countries. Network platforms must not, in principle, have a licence to operate gambling in Denmark if the licence holders who use the platform have a licence. It is not a requirement that all gambling opertors linked to the network are licence holders in Denmark. Customers from Denmark must, however, always access the network via Danish licence holders. Network platforms will be considered as subcontractors to the extent that the network platform does not have or carry out the greater part of the tasks listed under Obligations, Responsibility and Rights. The interaction with the licence holder may lead to the occurrence of overlap, but the network platform may, as a subcontractor, solely handle a minor part of the tasks involved. The network platform must have a licence if, in addition to operating the platform, it is a white labeller or gambling operator.

9 As the network platform is not required to have a licence, it means that the licence holder who redirects the customer to the platform will hold the responsibility for the game facilitated via the platform. 5.2 White labels In general, the white label concept is defined as a game produced by a company (white labeller) which is marketed by another or several other companies (white labels), making it appear as if the white label operates the product. This will allow almost identical products to be sold in a way that makes it look like a unique brand several times. Online gambling services may be permitted in white label structures and are not contrary to the prohibition against delegating rights provided that the requirements set out below in section 11.2 are met. White labeller The white labeller, i.e. the product owner, must, in relation to the operation of games, observe the obligations and hold the rights set out in section 5.1. The white labeller must accordingly be a licence holder. Licence holder Supplier and operation White labeller Gambling site White label Company 1 Gambling site White label Company 2 Gambling site White label Company 3 A white labeller may use subcontractors as referred to above. A subcontractor may not be a white label buyer (from the white labeller) or an affiliate. The licence holder is responsible, irrespective of the white label structure, for ensuring that games are operating in accordance with current legislation or the terms stipulated in the licence. White label buyer It is solely the marketing of the site and the associated games that may be carried out by the white label buyer (company 1, 2 and 3). The companies or individuals who have bought the white label solution may not have any access to gambling accounts and the operation in general. A white label buyer

10 May not have any relations to registered players other than the relation necessary for marketing the game. The prohibition against relations applies only in respect of the gambling activity. If the white label buyer has relations to registered players because of the operation of its normal area of business (other than gaming), this will not constitute circumvention of the prohibition. May solely have access to the information in the customer database that is required for marketing purposes. May not hold the ownership of the database of registered players or the gambling system. The white label buyer may under contract take over the ownership of the database when its cooperation with the white labeller is terminated. If the white label buyer has any influence on operations or gambling accounts, the structure will no longer qualify for being considered as a white label structure. A white label buyer cannot be a subcontractor to a white labeller. If the white label buyer owns the trademark which is used to market its gambling site, this will not be contrary to the rules. The licence holder is responsible for ensuring that games are carried through in accordance with current legislation and the terms of the licence. Therefore, a situation in which a white label buyer is responsible for the operation of games cannot normally arise. The licence holder cannot disclaim its responsibility. However, the white label buyer may beheld responsible, for example in case one or more companies (company 1, 2 and 3) have had influence on the operation of the games, etc., or if they know or ought to know of contravention of legislation or licensing terms. A white label buyer (company 1, 2 and 3) may also be held responsible if it acts contrary to general marketing practices or consumer protection rules and the relevant provisions of the Gambling Act. Even if the white label buyer will typically be in charge of the greater part of the marketing of the gambling site, nothing will prevent marketing by the use of affiliates as well. 5.3 Affiliates An affiliate is an individual or company that carries out work to market another entity s products or services. Gambling providers often use this type of affiliate marketing to market their sites and the games they offer, for example by means of links or banner advertising and also articles, etc. which are not in the nature of editorial cover.

11 Though affiliates are typically used in electronic communication the use is not restricted to this. Also hotels, cafes and other offline channels may be used in connection with marketing. Affiliates do not need a licence if they merely market the gambling operator s services and thus do not: have any relations to players. own gambling data. own rights associated with the trademarks and sites they are marketing. own parts of the gambling system used for the game or the site they are marketing. The general consumer protection and marketing rules and the Gambling Act s provisions on marketing and promotion apply to affiliates as well. They may incur liability according to these rules. 6 Application It is possible to apply for four types of licence: 1) A betting licence 2) An online casino licence. 3) A betting licence for a fixed term of one year with a gross gambling revenue limit of DKK 1 million (restricted revenue licence). 4) An online casino licence for a fixed term of one year with a gross gambling revenue limit of DKK 1 million (restricted revenue licence). Forms Applicants should use form no to apply for a betting or online casino licence. You will find the form on the site Forms. You must use the same form no matter the licence you wish to apply for. The key persons of your company (please refer to section 7.1 for the requirements to be met by individuals) must, in addition, fill in form no Furthermore, you must submit information about the games to be offered in Appendix B form no Some of the requirements in the area of the gambling system etc. cannot be fulfilled, however, unless the gambling system has been established. Please contact the Gambling Authority if you wish to postpone the fulfilment of the technical requirements, for example, for information about how to file such an application and the requirements for such a process. It is only possible to be granted postponement in connection with information to be submit-

12 ted in Appendix B. Applications that involve postponement may be expected to require a longer period to be assessed. If you wish to apply for a restricted revenue licence, you have to fill in application form no and Appendix A. Unlike other applications, this type of application will include items in the application itself or the associated appendices which you will not be able to fill in due to the special characteristics of the restricted revenue licences. Appendix A must always be filled in and submitted with all enclosures attached. Appendix B must not be filled in. Instead, you have to submit a detailed description of the intended offering of games, an account of your administration/business processes and a description of the technical equipment. In connection with its assessment of the application the Gambling Authority will be entitled to demand further information and possibly call you to a meeting. It will depend on the characteristics of the game and the measures which the Gambling Authority finds necessary in order to protect players. Application fee Before you file the application you must pay the fee. The account number to which the fee must be paid is shown on the application form. As of 1 January 2011 the fee is: DKK 250,000 for an application for a betting or an online casino licence. DKK 350,000 for an application for a combined betting and online casino licence. DKK 50,000 for an application for a restricted revenue licence for either betting or online casino operations. The fee must have been paid when you file the application to the Gambling Authority and proof of the payment must be enclosed. The fee will not, in principle, be returned even if you are not granted a licence. To read more about fees and the current rates of fees, you may check Filing an application Applications must be sent by regular mail in an electronic format in two copies, for example two CD- ROMs or two USB keys, each containing the filled-in application form, appendices and other relevant enclosures. All documents must be in separate named files in a standardised electronically readable file format such as pdf.

13 It is not possible to file applications in hard copy. Applications may also be filed by if the material in the case is of a limited extent, for instance applications for a restricted revenue licence. If the application is forwarded by secure , you should be advised that the Gambling Authority can only receive up to 20 MB per , including files attached. If you wish to encrypt the information, the Gambling Authority s public key (certificate) may be downloaded from You should send the application to the Gambling Authority at: Spillemyndigheden Helgeshøj Allé 9 DK-2630 Taastrup or [email protected] 7 Requirements to be met by applicants Both individuals and companies may apply for a licence to offer gambling services. There is no requirement that the applicant must be a resident of or established in Denmark. Persons or companies who apply for a restricted revenue licence to offer either betting or online casino games in Greenland must be established in Greenland, however. 7.1 Requirements on individuals You must satisfy four objective and three subjective requirements before you can be granted a licence. An objective requirement means that the conditions involved can be easily verified, so that, in principle, the Gambling Authority must not conduct any evaluation. The objective requirements are: You must have turned 21 years. You must not be under guardianship or requested guardianship (samværgemål). You must not have filed a petition for restructuring, bankruptcy or debt relief or be subject to restructuring, bankruptcy or debt relief proceedings. You must not have any debts outstanding to public authorities.

14 o Owing money to public authorities which is outstanding means that the deadline for payment has been transgressed and that the debt has been passed to the debt recovery authority, which is the Tax Authority Recovery Centre (SKATs Inddrivelsescenter). o Debts will not affect your possibility of obtaining a licence if 1) You have entered into a payment agreement, 2) You have provided full security for the debt, or 3) If there is disagreement between you and SKAT (the tax authority) on the existence or amount of the debt and SKAT has informed you that the debt will not be recovered until the disagreement has been clarified. Subjective requirements mean that the Gambling Authority must assess whether you meet them. The subjective requirements are: You must not have been convicted of a crime in Denmark and/or another country that may involve a risk that you will misuse the access to working with gambling activities. You must meet the requirement for appropriate professional operation. You must meet the requirement for appropriate financial operation. Requirement You may not have been convicted of a crime in Denmark and/or another country that may involve a risk that you will misuse the access to working with gambling activities. You must offer gambling on an appropriate financial basis. What does the requirement mean? The Gambling Authority must assess whether contravention of legislation etc. may involve a significant probability that you will misuse the access to working with gambling activities. All sentences may be relevant but it will always be considered what type of crime you have committed and when it happened in relation to the time of application and if it involved repetition or systematic contravention. Also contravention of tax and excise duty laws may be of importance for the assessment of you. The acceptance of fines etc. is also a reflection of a sentence. In its assessment the Gambling Authority takes into account, among other things, that The operator is in a position to pay out all potential winnings,

15 The budgets are consistent with the targets defined in the business plan, Sufficient funds have been allocated to the running of the business. You must offer gambling on an appropriate professional basis. To read more, refer to section 8.1. In its assessment the Gambling Authority takes into account, among other things, your prior experience in the areas of business operation and gambling activity. If you have no prior experience, the Authority will assess your education background and other experience. In addition it will be assessed if the games to be offered, the gambling system, etc. meet the requirements of the Act and executive orders. To read more, refer to section Requirements on companies The requirements to be met by companies are the same as those applying to individuals. However, the age requirement and the requirement that a person may not be under any type of guardianship do not apply. 7.3 Requirements on members of the executive and the board of directors Members of the company s executive board and its board of directors must meet the same requirements as individuals. 7.4 Applicants who are resident or established outside EU or EEA countries If you are resident or your company is established outside the EU or EEA, it is a requirement that you have a representative in Denmark. The representative, who must be approved by the Gambling Authority, may be either an individual or a company.

16 At the website you may find a survey of EU and EEA countries under Borger Aktier, pension og spil Spil Poker EU- og EØS lande [in Danish only]. Your representative must be able to represent you as licence holders in areas of administrative law and in procedural and criminal law matters, as the duties of this individual or company will include day-today communication with the Gambling Authority. If the representative is an individual, the representative must meet the same requirements as the applicant; see requirements on individuals in section 7.1. In addition, the representative must be resident in Denmark. If the representative is a company the representative must meet the same requirements as the applicant, see requirements on companies in section 7.2. In addition, the company must be established in Denmark. 8 Requirements for appropriate professional and financial operation To obtain a licence to operate gambling services in Denmark, you must render it probable that the operation of the gambling activity will take place on an appropriate professional and financial basis. The two concepts will be described separately below. The distinction between the two concepts may be floating, however. 8.1 Appropriate financial operation A gambling business must be operated on an appropriate financial basis. Therefore, when applying for a licence, you must enclose documentation that will enable the Gambling Authority to assess your company s financial position, etc. The Gambling Authority attaches importance to ensuring, for instance, that The company will be in a position to pay out all potential winnings, The budgets are consistent with the targets defined in the business plan, and Sufficient funds have been allocated to operating your company. The Gambling Authority will send a considerable part of the financial information to a firm of accountants, who will assist the Authority in its assessment. The accounting firm is under a duty of secrecy. The accounting firm will not make the final decision as to whether an applicant is assessed to be able to

17 carry out gambling operations on an appropriate financial basis. The Gambling Authority will make the final assessment based on recommendations from the accounting firm. The application form must be accompanied by the following enclosures, which will be passed on to the Gambling Authority s accounting firm: Financial situation, internal controls and financial capacity The applicant s financial statements for the past five years The applicant s funding plan The applicant s operating budget for the 12 months ahead with management s comments Documentation providing an overview of the applicant s largest accounts receivable at the time of application. See the section the applicant s risk profile below. An operating budget for the 12 months ahead broken down by expected revenue per type of game, expected costs by main cost categories such as payroll, selling costs, administrative costs, amortisation and depreciation, service charges to group companies, net interest expenses and income taxes accompanied by management comments including budget assumptions. A list of debtors broken down by age, with the particular accounts broken down by the following maturity categories: Not due More than one month overdue More than three months overdue More than six months overdue More than nine months overdue The list must show the names of debtors and the amount of each account outstanding. Information showing who the applicant s owners are Owners should be defined on the basis of qualified shareholdings. Please state the names, addresses and registration numbers of

18 all owners who are characterised by possessing qualified shareholdings of 10 per cent or above. The ultimate parent s financial statements for the past five years An ultimate parent is defined as the owner(s) who, in total, possesses a qualified shareholding above 50%. Please enclose financial statements for the past five years from the top group company/companies presented according to generally accepted principles (Financial Statements Act, IFRS, US GAAP, etc.). If the ultimate owner is an individual, corresponding accounting data should be submitted, for instance annual accounts, statements of capital or similar data. The ultimate parent s operating budget for the 12 months ahead Internal controls The applicant is requested to submit a copy of its compliance and ethics programmes (codes of ethics). Copies of written procedures for: 1. General policies for the applicant s internal controls 2. Framework for internal controls such as COSO The operating budget for 12 months ahead of the top group company/companies, showing expected revenues, costs, net interest expenses and corporate income taxes accompanied by management comments, including significant budget assumptions. A compliance and ethics programme comprises descriptions of the establishment and implementation of rules and principles dealing, for instance, with fraud exclusion, fairness conduct, money laundering, acceptance and exclusion of customers, problem gambling, etc. Re 1: Written business procedures for the company s internal controls. Internal controls may for example be concerned with the following areas: Revenue

19 3. Implementation of risk assessments in the areas: a) Setoff-free account, b) IT, c) Book-keeping, d) Reconciliation of customer funds, e) Financing procedures and f) Mathematical models. 4. Assessment of all major risks underpinned by the associated risk handling policies. Book-keeping Reconciliation Setoff account Salary determination Bonus calculation List of persons authorised to sign, including access to liquid bank accounts. IT security. Re 2: The Committee Of Sponsoring Organisations (COSO) is a generally recognised framework that describes an internal control system based on the following phases: - Internal environment - Objective settings - Event identification - Risk Assessment - Risk Response - Control Activities - Information & Communication - Monitoring The framework is recommended only, and the particular company may have established its own control system based on other similar principles. Re 3: Documentation proving that the applicant has identified risks associated with the mentioned areas and that the applicant has implemented compensatory controls or similar to counter the risks identified. Re 4: Management s specific description of all significant risks and description of counteracting controls.

20 A copy of the applicant s policy for accepting customers from areas covered by OFAC restrictions A copy of the areas of work for the internal audit, compliance group or other monitoring bodies A copy of the past 12 months risk management reports to the executive and board of directors A copy of the applicant s procedures and controls designed to ensure that the applicant has sufficient funds to pay out all potential winnings. A copy of the applicant s funding plan, which doc- OFAC relates to companies in the financial sector. It may, however, be relevant to gambling-related companies. OFAC publishes a list regularly by which they red flag a number of countries, companies, individuals, etc. The applicant may have defined policies relating to this list, making monthly data withdrawals, for example, to compare the OFAC list with its own payment flow to make sure that it does not make payments to any red flagged entities or individuals. If the applicant has set up an internal audit function, compliance group or another independently monitoring body, the applicant is requested to enclose documentation which proves it. It may be a description of these departments, their managerial position in the organisation, reporting channels, responsibilities and reviews completed. A report containing a prioritised overview of significant risks associated with the applicant s business and the games operated by the applicant. The report will typically include a description of risks and the measures taken to counter these risks, and a description of whether the risk management of the particular risks works as intended or requires improvement. A funding plan containing a specific description of mathematical calculations of financial risks and the funding of such risks. Financial risks include currency risk, interest rate risk and gambling risk, for example. A funding plan containing a specific descrip-

21 uments how it will ensure correlation between its system for monitoring net positions and the actual funding. Financial capacity A copy of the guarantee provider s credit rating of the applicant Documentation of software that continuously monitors and reconciles all customer accounts to a setoff-free bank account held in the applicant s name. The software system must be tested on an ongoing basis. A copy of guarantees issued to third parties. Organisation The company s history and documentation of its company registration. Management history underpinned by statements from authorities Corporate structure An overview of the applicant s corporate and group affiliation supported by official certificates tion of mathematical calculations of financial risks and the funding of such risks. Financial risks include currency risk, interest rate risk and gambling risk, for example. If guarantees to cover the applicant s financial risk or similar have been provided by a third party to the applicant, documentation that proves it must be submitted. If an official credit rating has been issued, for example by S&P (Standard and Poor s Credit Rating Agency), this must be submitted. In case the applicant has provided guarantees to a third party, the applicant should submit documentation of such guarantees. For instance a transcript from the Commerce and Companies Agency or similar. For instance a transcript from the Commerce and Companies Agency or similar with comments on significant and/or frequent changes of management. A group chart or other description of the group s structure, indicating shareholdings, using the definition of a group set out in the Financial Statements Act or another relevant definition (IFRS, US GAAP etc.).

22 A description of the applicant s or associated companies present gambling activities (if possible in all countries) A survey of the company structure in Denmark A description of planned activities in Denmark, including other activities than those for which the applicant has applied to date. Official certificates may be transcripts from the Commerce and Companies Agency, certifying the company s registration. The applicant s risk profile The applicant s financing plan/funding plan A funding plan containing a specific description of mathematical calculations of financial risks and the funding of such risks. Financial risks include currency risk, interest rate risk and gambling risk, for example. The setoff-free account To protect the players funds you must have a setoff-free account at a bank, which must be kept separate from other funds. The funds in the account may solely be payable to players and they must be protected in case of the licence holder s insolvency. The amount held in the account must always be equal to the total amount deposited on the players gambling accounts. In practice, this requirement is difficult to observe. Your accounting system must therefore be organised in a way that makes it possible at any time to obtain a correct indication of the deposits held in the players accounts. The setoff-free account must be updated once every 24 hours to ensure that the two amounts will match. 8.2 Appropriate professional operation The Gambling Authority s evaluation of applicants will comprise the requirements set out in section 5.1 as well as the relevant Acts and Executive Orders, and it will be based on the information you submit with the application.

23 For the purpose of the evaluation, one of the documents you must enclose is a business plan. In the application you should state the staff members who are responsible for: Gambling software and operating games IT security System changes Monitoring of money laundering of proceeds and the financing of terrorism (only in the case of an application for an online casino licence not in an application for a restricted revenue licence) Financial affairs. In principle, the staff responsible should be employed by the licence holder s company, but the Gambling Authority will accept persons employed in the same group, for instance, if it can be guaranteed that they are empowered to establish measures and carry through changes that may be necessary. These persons must also provide and account for all information and documentation which the Gambling Authority may need. These persons may in no case be employed by subcontractors or companies that are not part of the same group as the applicant. The application must be accompanied by one or more CVs that illustrate each responsible professional s level of experience. It must not necessarily be different persons. The CVs of the responsible professionals must illustrate to the Gambling Authority that they are qualified for their jobs. Thus, it is not necessary to include personal details about family situation etc. in the CV. It must give a true and fair view of the person s track record and a description of his professional competency to take on the responsibility. Appendix A must be accompanied by a CV of each member of the company s executive and board of directors. These CVs should be more detailed than the one referred to above. However, in principle, the Gambling Authority does not need to receive personal information like family situation details. In cases in which a person in a member s family or circle of close persons may be considered to have the capacity to exert controlling influence on the member of the executive or the board of directors, and if certain types of information about the person, such as a criminal record, may be relevant for the Gambling Authority to know, such information must be submitted Control of gambling data, etc. Schedule 1 to the Executive Orders requires the establishment of a SAFE and use of the Tamper Token. In addition, operators who provide games online must be linked with the Gambling Authority s register of self-excluded players (ROFUS).

24 SAFE is your own data storage (a file server) where you are required to store data - in accordance with standard records - for all games hosted by you. All licence holders are required to establish a SAFE. It must be possible for the Gambling Authority to get online access to the licence holder s data storage. Tamper Token Tamper Token is a security system which is aimed to ensure that the data saved by the licence holder in its SAFE remain unchanged while stored by you. Tamper Token will be implemented in the Gambling Authority s system and handle: Creation of keys (tokens) used for the calculation of identification codes. Storage of identification codes for later control. Continuous control to check that the fixed period of time for terminating tokens is observed. Verification that a retrieved series of data has not been changed in relation to the identification code received. ROFUS The Register of Self-Excluded Persons (ROFUS) is a register of all players in Denmark who have voluntarily requested exclusion - temporarily or permanently - from playing online games in Denmark. The register is located at the Gambling Authority, which is also responsible for keeping the register. If a player wants to be registered on the Register, you must arrange access to the Gambling Authority s website, from where exclusion may be effected. For a further description of ROFUS, please refer to section 8.2.8, Exclusion from gambling by the Gambling Authority. For a more detailed technical description of the above-mentioned systems, please refer to where under the item: Technical requirements and service descriptions you may find further information Link-up to SAFE and ROFUS You must carry through a number of tests of these systems. The link-up process consists of two stages: Testing of access to your SAFE The Gambling Authority must be able to access your SAFE to retrieve data. You must disclose a user name, password and end point to your SAFE. This information must be given to the Gambling Authority in the application form (Appendix B). Approval of standard records In connection with the application process you must deliver the following material:

25 1. A number of specifically defined standard records. All records must be packed with Tamper Token and be placed in your SAFE. 2. A description of your understanding of each data element included in the standard records. The applicant must describe its understanding of the field, including any choices made in connection with the implementation. The material must be sent to the Gambling Authority along with Appendix B or no later than within 14 days from the date the application was submitted. The document Testing of standard records, which describes the requirements is accessible at www. Spillemyndigheden.dk. Tamper Token and ROFUS You must demonstrate correct use of Tamper Token and show that it is possible to communicate with the ROFUS register. If you wish to gain access to Tamper Token and ROFUS, you should contact the Gambling Authority at the address: [email protected]. Please report your applicant name, contact person and the contact person s address. The Gambling Authority will then send a form with a user name and password and the tests to be run and the test civil reg. numbers (CPR numbers) you must use to run the test. Concluding assessment When you have completed the required testing, you should send the completed test sheets and the associated documentation to the Gambling Authority, whereupon an overall assessment of the process will be conducted and you will be informed of the result. For a more detailed description of the link-up process please refer to the guidelines: Description of the connection process, which is available in Danish under the item Technical requirements and service descriptions in the Gambling Authority s website Requirements for your gambling system What does the concept of gambling system comprise? The Gambling Authority defines the gambling system as electronic or other equipment used by or on behalf of licence holders, including equipment which is used to store information concerning a person's participation in gambling, including historical data, as well as outcome data, generates and/or presents games to the player, or

26 Determines the outcome of a game or calculates whether the player has won or lost in the game. The illustration below shows the components (normally) used to operate gambling online and which of these components are considered to be part of the gambling system. Payment transmission services and the SAFE are not part of the gambling system. Gambling System Front End Back Office Data Warehouse Payments Transfer Game Operation SAFE Description of the various components: Front End is the word meaning the part of a system with which the customer interacts, which is the gambling site, including the server on/from which the site is operated; and client software installed on the customer s computer and/or mobile telephone (Falls under item 1.) Back Office is a broad expression meaning the part of a system in which customer specific data are stored. At a minimum this will be the customer s identity details and financial data, and in some cases gambling data will also be stored there (Falls under item 2.) Data Warehouse is the word for the part of a system in which system generated data are structured and stored. In the illustration above it will essentially be gambling data, but in certain cases also financial data may be stored there (Falls under item 2.)

27 Game Operation is the Gambling Authority s expression for that part of the system which determines the outcome of a game or calculates whether the player has won or lost in a game. The Random Number Generator with its support processes and the system for carrying through betting and the like are located here (Falls under item 3.) Certification of the gambling system, etc. The Gambling Authority sets the requirement that your gambling systems, business procedures and business systems must be certified by an accredited testing agency before the gambling system is used to offer games to players. The requirements in respect of certification are described in three documents: Technical Standards of the Danish Gambling Authority The Gambling Authority s programme for managing system changes The Gambling Authority s requirements for accredited testing agencies. The certifications are divided into five different categories. To obtain status as an approved testing agency qualified to certify the particular categories, the testing agency must satisfy the requirements specified in the document the Gambling Authority s requirements for accredited testing agencies. The categories are: Certification category Requirements Description A Gambling system Technical Standards of the Danish Gambling Authority Random Number Generator (RNG), game rules, registration, reporting on operations, customer overview, terms and conditions, etc. B Business system Technical Standards of the Danish Gambling Authority Information security, etc. (audit) C Preventive measures to counter money laundering of proceeds and financing of terrorism D Vulnerability and penetration testing Technical Standards of the Danish Gambling Authority Technical Standards of the Danish Gambling Authority Registration, security, suspicious player behaviour Information security (testing) E Managing system The Gambling Au- Standard for approved changes

28 changes thority s Programme for Managing System Changes to gambling systems The documents Technical Standards of the Danish Gambling Authority and The Gambling Authority s Programme for Managing System Changes indicate the requirements which the testing agencies have to certify. Certain requirements may be certified by several different certification categories. For example, certain parts of the customer identification process may be certified by both category A, B and C. Postponement of the requirement for certifications If the certifications (A-E) have not been achieved before the commencement date on 1 January 2012, the licence will be granted with the condition attached that the compliance with the requirements must be ensured as soon as possible and that the Gambling Authority must be informed about the certification time schedule. Initially, fixed-term licences for a period of one year will be issued. One reason for this approach is that it may be time-consuming to get a gambling system etc. certified to international and Danish standards. It will be possible for the licence holder as from the commencement date on 1 January 2012 to get a period of up to one year to obtain complete certification of its gambling system. This means that gambling services may be provided in the intervening period on the strength of the belief that the licence holder with get the certifications into place. There must be ongoing dialogue with the Gambling Authority in the intervening period. If the necessary certifications have not been obtained before Appendix B is submitted, the fields in the form concerned with certification should not be filled in. If a time schedule for the certifications has been drawn up it should be enclosed. About the Gambling Authority s programme for managing system changes in particular Irrespective of whether the certification requirement has been postponed, the licence holder must comply with the Gambling Authority s programme for managing system changes. System changes must be logged, as indicated in the programme, and the Gambling Authority must be informed of all changes to the RNG, and any implementation of brand new games must be approved by the Gambling Authority before the implementation is carried through. In respect of changes that must be analysed by testing agencies according to the programme, it is optional for the licence holder whether to choose to have the change analysed. Using accredited testing agencies The document the Gambling Authority s requirements for accredited testing agencies specifies the

29 requirements imposed on the testing agency you may choose to carry through certifications for you. The testing agency must set up an audit programme based on the Gambling Authority s certification programme and against this background acquire accreditation to ISO When a testing agency has been accredited it may, without any approval from the Gambling Authority, carry through certification of gambling systems, etc. When your gambling system is ready to be certified you should approach the testing agencies you want to use and inquire whether the enterprise is an accredited agency. The licence holder is responsible for proving to the Gambling Authority that the testing agency complies with the requirements defined by the Gambling Authority in its requirements for accredited testing agencies. The document Technical Standards of the Danish Gambling Authority consists of a number of requirements listed as points with each requirement having a reference to the certification categories A-E. When an accredited testing agency has certified a given requirement in one certification category and this requirement is part of several certification categories, it will not be necessary to repeat the certification of the requirement. Location of the gambling system The gambling system must as a main rule be located physically in Denmark. The system may be located physically in another country if You have a licence to operate gambling in that country, The Gambling Authority has made an agreement with the authority that supervises your gambling operations in that country and The Gambling authority approves the location in the country in question. In special cases the Gambling Authority may approve location of part of the gambling system in a country with which the Gambling Authority has not made any cooperation agreement, provided that it will be possible for the Gambling Authority to supervise it in an appropriate manner Registration of customers (players) It is a fundamental requirement that you must have knowledge about your customers. You must be convinced that the customer is in fact the person he says he is. There can be no circumstances which cause doubts as to whether the customer is in fact who he says he is. The extent of the identification procedure must be determined on the basis of an individual risk assessment. However, the risk assessment must never result in no identification measure being taken. Below is a description of the guidelines in the area, but the licence holder is obliged to introduce stricter pro-

30 cedures where it is assessed that there is a greater risk. For each customer relationship, you must be able to prove to the Gambling Authority that the extent of the checks was sufficient. In order to be allowed to participate in gambling, the player must be registered as your customer. Only natural persons may be registered as players, and this means that companies, clubs, etc., are not allowed to have gambling accounts. Moreover, you are required to make the registration conditional upon the customer only acting on his own behalf. Registration of the customer In connection with the registration, the customer must provide the following information: Name Address Civil reg. no. (CPR) If the customer does not have a CPR number, you must obtain other similar identification information. This may be a personal registration number applied by the public authorities of the person's home country or, if this is not used in the country in question, information about date and place of birth. Customers without CPR numbers include tourists staying in Denmark. You are required to confirm all information by means of sufficient documentation. Customers without CPR numbers only include customers who actually do not have a CPR number. If the customer does not wish to state his CPR number or similar information, he cannot be registered as a player. Specific requirements about addresses The address stated must be the customer's permanent address (habitual residence). A post-office box address does not satisfy the requirement. If the customer is homeless, it may be acceptable to establish a customer relationship even though address information has not been provided. Instead, the customer may obtain documentation from the local authority confirming that he is homeless. If the customer resides outside Denmark, please refer to section Proof of the customer's identity The information provided by the customer must be checked. The name, address and CPR number of the player must be verified by means of a reliable and independent source, such as the CPR Register. All three pieces of information must be checked. Thus it is not sufficient only to check the CPR number and name, but all three pieces of information do not have to be verified through the same source.

31 For customers without CPR numbers, you are also required to perform a check of the name, address and the identification similar to the CPR number. When carrying out the check, you must be aware that passports and driving licences do not contain information about the holder's home address. Therefore, it will not be sufficient to submit a copy of these documents. Supplementary documentation must be provided as well. This documentation may be provided in the form of an information check by using NemID as it is a requirement that customers use a digital signature with a security level corresponding to the OCES standard when logging in to their gambling account. Prior to first login, the data should be compared with the information which has been provided by the customer and verified. Access to the gambling account must only be granted if the data agree. The digital signature requirement does not apply to customers without a CPR number either. In connection with the registration of such customers, the identity must be checked further. Based on a risk assessment, further information must also be obtained for customers with a CPR number if there may be doubt about the customer's identity. This may also be the case in the event of a politically exposed person, see the section about politically exposed persons below. Further information for confirmation of the customer's identity may include: Submitting picture identification. Requiring that the first deposit be made by means of a transfer of funds from the customer s account with a bank where the customer has provided proof of identity. Contacting the customer by telephone after having checked the telephone number by looking it up in a reliable place. Sending a contract or a similar document to the customer, requesting him to sign it and return it. Picture identification must originate from a reliable and independent source and will thus typically be issued by public authorities. The information contained in the picture identification must be current. You must not set up a gambling account if you discover that the customer has provided incorrect information. You may adjust individual pieces of information if you assess that the customer did not intend to provide incorrect information, for example if the customer did not state whether he lives to the right or to the left in a multi-storey building. Information about the customer's intended gambling volume You are required to obtain information about the customer's intended gambling volume at the same time as the customer provides the identification information (name, address and CPR number). The information must be obtained from the customer. Therefore, you are not permitted to assess the expected

32 gambling volume yourselves based on the customer's profile. However, you may provide the customer with predefined categories to choose from Politically exposed persons residing in another country This section only applies to online casino licences. For customers who fall within the definition of politically exposed persons and who reside in another country, special rules apply, including: Requirements for special procedures. Enhanced identification requirements. Requirement for information on assets and sources of income. Requirement for enhanced monitoring. The reason for this is that the international community (the FATF, the EU) requires particular attention to be paid to politically exposed persons (PEPs) because of an increased risk of money laundering related to corruption, etc. What is a politically exposed person? The concept of politically exposed persons is defined in accordance with the Money Laundering Act and its associated executive orders. Therefore, the text of these guidelines is in accordance with the Danish Financial Supervisory Authority's guidelines on the Act on Measures to Prevent Money Laundering and Financing of Terrorism. Politically exposed persons are defined as Persons who are or have been entrusted with a prominent public function and immediate family members, or persons known to be close associates, of such persons. The Danish Financial Supervisory Authority has defined the following concepts: Politically exposed persons, who are or have been entrusted with a prominent public function, include the following: Heads of state, heads of government, ministers and deputy ministers or assistant ministers. Members of parliaments. Members of supreme courts, of constitutional courts or of other high-level judicial bodies whose decisions are not subject to further appeal, except in exceptional circumstances. Members of courts of auditors or of the boards of central banks. Ambassadors, chargés d'affaires and high-ranking officers in the armed forces.

33 Members of the administrative, management or supervisory bodies of state-owned enterprises. If the person mentioned has ceased to be entrusted with a prominent public function for a period of at least one year, that person is no longer to be considered as a politically exposed person. The persons mentioned do not include middle ranking or more junior officials. Immediate family members include the following: Spouses. Registered partners. Children of the politically exposed persons. Parents of the politically exposed persons. Persons known to be close associates include the following: Persons who have joint beneficial ownership of legal entities or legal arrangements, or have any other close business relations, with one of the primary persons referred to under the first list of bullets above. Persons who have sole beneficial ownership of a legal entity or legal arrangement which is set up for the benefit of one of the primary persons referred to under the first list of bullets above. Special procedure requirements If the customer resides outside Denmark, you must ask the customer to state the following: Current occupation. Whether the customer is or has been entrusted with a prominent public function or whether the customer is related to or has close cooperation with a person who is or has been entrusted with a prominent public function. Then you must: 1) have adequate procedures to determine whether the customer is a politically exposed person who is a resident of another country; and 2) have senior daily management approval for establishing business relationships with such customers. Daily management means the enterprise's management or the manager of the organisational part of the enterprise, such as a division or a branch. However, this does not apply if other information is available which documents that the customer is not a politically exposed person.

34 Your information about the customer may also help determine whether further investigations need to be instituted to find out if the customer is a politically exposed person. It may also be relevant for you to make a routine internet search for the customer's name via a search engine. If you have many customers who are resident outside Denmark, it may be relevant to subscribe to services from international information providers specialising in making and updating lists of politically exposed persons. Based on a risk assessment, you will have to decide whether this is sufficient. The number of customers who are resident outside Denmark and the nature of the countries where the customers live may increase the probability that you have politically exposed persons among your customers who are not on the lists of these private providers. Based on a risk assessment, this may mean that the enterprise has to cooperate with locals, such as lawyers, bank connections, etc., to verify whether the customer is a politically exposed person in the country in question. Tightened proof of identity requirements If a politically exposed person who is resident outside Denmark is registered as a customer, there are further tightened proof of identity requirements. Please refer to section for information on proof of the customer's identity. Requirements for information about sources of income and funds You must take reasonable measures to gather information about politically exposed persons sources of income and funds involved in the gambling activity. This entails that the customer must be requested to provide the required information. This information must then be assessed on the basis of the circumstances, including the customer's transactions. Duty to pay special attention You must continuously monitor the business relationship with a politically exposed person. Specific, enhanced monitoring of the business relationship must be established The players' gambling accounts When you have obtained information about the customer's identity and confirmed the information by means of sufficient documentation, you need to set up a gambling account for the customer. One player may have several gambling accounts, but customer identification must be carried out every time a gambling account is set up. A gambling account must provide the player with information about Account balance Gambling history (including stakes, winnings and losses) Deposits and withdrawals

35 Related transactions. Gambling history involves providing the player with access to view all stakes, winnings and losses resulting from a session of play including, as a minimum, an indication of the minute the action took place. The information must be available to the player in the gambling account for at least 90 days. The player must also have access to receiving the information upon request for a minimum of twelve months. It must only be possible for the player to gain access to the gambling account using a digital signature. This must, as a minimum, have a security level corresponding to the OCES standard. NemID meets this requirement. Upon each login, it must be verified that the digital signature applied corresponds to your information about the player. Currently, there is no digital signature which can be used for mobile telephones and tablets, etc. Therefore, it is the intention of the Gambling Authority to grant an exemption until a technical solution for these media becomes available. It is a requirement for the exemption that the player activates his use of these media by logging in to a gambling account via the Internet. Upon login to the gambling account, the usual player identification requirements, including the digital signature requirement, apply. The digital signature requirement does not apply to customers without a CPR number either. For such customers, adequate identification of the player must be carried out upon login in some other manner, for example through the use of secure passwords. Temporary gambling account Until the customer's identity has been confirmed correctly as referred to in section (proof of the customer's identity), you are only permitted to set up a temporary gambling account. The temporary gambling account must be shut down if the customer has not been correctly identified with documentation within one month. You are not permitted to set up a temporary gambling account for players who are listed in ROFUS. The customer may deposit a maximum amount of DKK 10,000 into a temporary gambling account, and no withdrawals may be made from the gambling account. This means that any winnings won must not be withdrawn before the gambling account has gained status as a normal gambling account. However, the amounts must be credited to the gambling account immediately after they are won.

36 When a temporary gambling account is shut down, the player will only be able to get the remainder of the deposited amount back. Any winnings won by the player will accrue to the licence holder. The players deposits to the gambling account It must only be possible for gambling accounts to accept payments from payment service providers that meet the requirements of the Payment Services Act. The player must not be granted a credit and cash deposits are not allowed. When an amount has been deposited into the gambling account by the player, it must be shown immediately after the amount has been received. In the case of bank transfers, the amount must not be credited to the account until immediately after the amount has been received. Closing a gambling account When a gambling account is closed, you must pay out the balance of the gambling account to the player no later than five working days after the account has been closed Information to the players All necessary and relevant information to the player must be in Danish, including playing rules and standard terms. It must be possible for the player to find information about: all costs associated with participation; the value of all winnings (market value); where and when the winners are announced; payout percentages used; start and end dates for participation; how winnings are paid to the winners; deadline by which valid winning claims must be submitted; the name of the licence holder and the physical address where the licence holder is established, address, postal address (if applicable) and other information about the licence holder required to contact and communicate with the licence holder; the central business registration number (CVR No.), if the licence holder is registered in the Central Business Register (CVR); how the player can file a complaint with the licence holder; and the date of the licence to provide gambling services. The items of information that are described as relevant information depend on the form of the game and the gambling services provided.

37 It must be stated on your website that the licence for the game has been issued by the Danish Gambling Authority and that the Gambling Authority keeps your operation of gambling services under supervision, and it must include a link to the Gambling Authority's website. Moreover, in connection with the provision of gambling via websites, it must be stated that persons below the age of 18 are not allowed to participate in the games; information about responsible gambling and the potential harmful effects of gambling must be provided. The information must be prepared in cooperation with a treatment centre; the player must be able to access a gambling addiction self-test; and the player must be able to find information about and addresses for Danish treatment centres. This information must be in a prominent place on the website, for example by being on the homepage, and it must always be possible for the player to access the information from all pages of the site. During online casino games, a clock must be visible to the player so that it is possible for the player to see how much time he spends on the site. The clock does not necessarily have to be a traditional clock or set to a specific time zone. It may instead be a timer function that starts when the player logs in The players' possibility of limiting gambling Below is a list of measures aimed at allowing players to set limits to their gambling. They are merely minimum requirements. Therefore, it is always possible to implement further measures. Deposit limits The players must be able to set daily, weekly and monthly (24 hours, 7 days and 30 days from the time of registration) deposit limits. All three options must be offered to the players, and it must be possible for the individual player to set a nominal amount of his own choice. Exclusion from playing - the individual gambling operator Players must be able to exclude themselves from playing. It must be possible to choose the following: a brief break from playing (cool-off period), temporary exclusion for at least one month and permanent exclusion. In connection with permanent exclusion, the player's gambling account must be shut down and the customer relationship must be terminated. The player can only set up a new account again at the earliest one year after the gambling account was shut down.

38 Exclusion from playing - the Gambling Authority If the player chooses to voluntarily exclude himself from playing (though not by means of a brief break from playing), you are required to provide access to the Gambling Authority's site where it will be possible for the player to exclude himself from all gambling via the Register of Self-excluded Players (ROFUS). It is not possible for a gambling operator to enter a player in the ROFUS on behalf of the player. The Gambling Authority is responsible for keeping the ROFUS. When registering a new player, you must make a ROFUS inquiry. If the player is listed in the ROFUS, you are not permitted to set up a gambling account - not even a temporary one. Each time a player logs in to the gambling system, you must consult the ROFUS and check that the player has not been entered in the register. When a player is listed in the register, the player must be denied access to play and the customer relationship must be terminated. One year from the date of entry on the register, a player who has requested permanent exclusion may ask the Gambling Authority to be deleted from the register. Temporary exclusions will be deleted automatically at the end of the exclusion period. The ROFUS contains information about: CPR number for the players in the register. Date and time of exclusion. The date when the temporary exclusion ends Requirements which only apply to betting licences You are required to takes measures which are suitable for reducing the risk of match-fixing. Land-based betting Many of the above-mentioned requirements do not apply in connection with the provision of landbased betting, for example because it is not required to set up gambling accounts. The following sections do not apply: Registration of players (section 8.2.4) The players gambling accounts (section 8.2.6) The player's access to limiting gambling (section 8.2.8)

39 9 Issuing licences Licence period A licence to provide betting or online casino games is granted for a period of up to five years unless the application is for a restricted revenue licence. The geographical area of the licence With a licence to provide betting or online casino services, you are authorised to provide gambling services to persons: who are resident in Denmark and have a CPR number. who do not have a CPR number, if they are staying in Denmark for a brief period of time, such as for a vacation. It is possible to apply for the licence to cover the provision of gambling services in Greenland but not for the provision of gambling services in the Faroe Islands. It is not possible with a Danish licence to provide gambling services to persons who are resident in other countries, irrespective of whether they are of Danish or another nationality. Terms of the licence The licence will usually contain a number of specific terms. Therefore, you must always pay special attention to the terms stated in your licence. Examples of terms include: Requirement for establishment and design of a bookkeeping account to be used for the setofffree account. That the gambling operation must be sound in order to avoid social, health-related or publicorder problems. Violation of the terms of the licence may result in withdrawal of the licence. For a general description of the terms of restricted revenue licences, please refer to section 10 below. Publication The Gambling Authority will regularly publish a list of the licence holders with a licence to provide

40 betting or online casino services in Denmark. This list is available on the Gambling Authority s website at 10 The restricted revenue licence Restricted revenue licences are different from other licences in that the licence is valid for a maximum of one year; the gross gambling revenue (stakes less winnings) must not exceed DKK 1 million; and individuals or companies applying for a restricted revenue licence for provision of betting or online casino services in Greenland must have an established presence in Greenland. If the limit of DKK 1 million is exceeded, this may result in you being reported to the police for violation of the terms of the licence. In the course of the criminal proceedings, there may be a request for an order for confiscation of the illegal proceeds. Application Applicants must complete application form and Appendix A with accompanying enclosures. You can find the form on the Gambling Authority s website at Forms [in Danish only]. However, the form and Appendix A will contain boxes that you will not be able to fill in because of the special characteristics of restricted revenue licences. Appendix B does not have to be filled in. Instead, you must submit a detailed description of the games you intend to provide, including an account of management/procedures and a description of your technical equipment. Is it possible to apply for more than one licence? You may apply for one or more restricted revenue licences for provision of one or more specific betting or online casino services. This means that you may apply for three restricted revenue licences for provision of three different manager games: one for cycling, one for football and one for motor racing or you may apply for one restricted revenue licence covering all three games. You must submit an application with accompanying enclosures for each restricted revenue licence you apply for. You must be aware that you can only apply for one restricted revenue licence for provision of the same game in the same year. You cannot apply for two or more restricted revenue licences for provision of online poker games within the same year.

41 The same year means a period of 12 months, e.g. from 1 December to 30 November, and not the calendar year. Moreover, you must be aware that the provision of gambling services and the revenue earned from the provision of gambling services based on the individual licences must be kept separate if you have more than one restricted revenue licence. Terms Restricted revenue licences are governed by the gambling acts but excepted from the executive orders. For example, a gambling operator with a restricted revenue licence does not have to satisfy the same requirements for supplying data to the Gambling Authority s control system and is not covered by the rules on money laundering and registration of players. The Gambling Authority will set a number of specific terms in the licences. Terms will be set to ensure that the game is provided on an appropriate financial and professional basis. The specific terms set in the individual licence will depend on the type of game and the characteristics of the game and the risks associated with providing the game. Depending on which game you are applying for permission to provide, there will be no extensive terms if, for example the player's stake is limited to, for example, DKK 50; the turnover of the game is relatively low; the number of potential participants in the game is limited; the game is simple and easy to understand for the players; the game is easy and manageable to supervise for the Gambling Authority. The individual licence may contain a number of specific terms concerned with, for example, IT equipment, changes to games or selection of games, registration of players, bookkeeping design, prevention of manipulation of games, marketing of games and treatment of player complaints. Examples of special terms which may be set in the restricted revenue licences: Game type Fixed-odds betting Pool betting Example of terms Periodic reporting to the Gambling Authority, e.g. monthly reporting on stakes, winnings or the like. Reporting to the Gambling Authority, e.g. month-

42 Online casino games (gaming machines, roulette, punto banco, black jack, poker, etc.) The game is played with high stakes and at high speeds The game is played with low stakes and at low speeds ly reporting on finished games (pools) stating stakes, numbers of winnings broken down by prize categories and similar information. Terms requiring certification of IT equipment including RNG by a testing agency. Terms requiring periodic reporting on finalised games, stating stakes and winnings. Terms requiring a statement on the RNG's generation of randomness Annual fee Holders of a restricted revenue licence are not required to pay an annual fee as mentioned in section 13 below. 11 Making changes to a licence You may need to make changes to the basis on which your licence was issued. This could be changing key persons, providing new games or restructuring of your enterprise due to a merger, etc Application concerning other games than those mentioned in the licence Online casino With a licence for online casino services, you can provide the games roulette, baccarat, punto banco, black jack, poker and games on gaming machines offering cash winnings unless your licence is limited to individual types of games. In addition, you may - without a special licence - provide games that meet the criteria for being a combination game. The licence holder is responsible for assessing whether a game meets the criteria and for ensuring that a lottery, for example, is not provided. A combination game is defined as a game in which a participant has a chance of winning a prize and where the probability of winning is based on a combination of skill and chance. The outcome of combination games is decided by a combination of elements of chance, such as the dealing of cards, the throw of dice, draws, etc. and the player s skill/ability. Whether a game is a combination game or not does not depend on the distribution of chance or probability.

43 If an element of chance is added to a game which is otherwise decided by skill only, e.g. by a draw being carried out between the most skilled players, the game can be described as a combination game, as the possibility of winning in the game depends on a combination of skill and chance. Conversely, the combination of chance and skill must be a natural part of the game. This means that a game like bingo cannot be turned into a combination game by making the access to the game conditional upon providing a correct answer to a question. Examples of combination game include: Whist Hearts Yatzy Ludo Rubber bridge Backgammon If you are in doubt as to whether a game is a combination game or a lottery, you may contact the Gambling Authority for an assessment of the game. Before providing a new game, you must notify the Gambling Authority about this, see section for specific information on the Gambling Authority s programme for managing changes, and this may result in a requirement for a repeated certification of parts of your gambling system. The difference between lotteries and gaming machines The provision of lotteries is not allowed. It may be difficult to distinguish between games on gaming machines offering cash winnings and lotteries. When deciding what type of game it is, the Gambling Authority will give particular attention to whether the game appears to the player as a gaming machine offering cash winnings or a lottery. Before providing a game, the licence holder should always assess whether the game may be a lottery. Betting With a betting licence, you are permitted to provide all kinds of betting services, subject however to the restrictions described in section Transferring a licence A licence cannot be transferred. In the event of corporate restructuring, such as a merger, demerger or an exchange of shares, the Gambling Authority must be notified of this in advance and grant its approval.

44 Delegation of a licence It is not possible to transfer (delegate) your licence or the rights and obligations consequential upon the licence. This means that another company cannot provide gambling services based on a licence issued to you. Despite the ban against delegating, it is permitted to use external subcontractors. However, you are always responsible for the games and you cannot disclaim responsibility in relation to the Gambling Authority or the players. The ban against delegating does not prevent you from providing gambling services via white label constructions or selling games through employees, etc. Please refer to section 5.1 for more information about this Other changes Members of the board of directors or the executive board If a new member joins the board of directors or a new executive officer is employed for the executive, the Gambling Authority must be notified about this within fourteen days. This is done by the person in question filling in and submitting Appendix A of the application. The Gambling Authority may decide that a member of the board of directors or a member of the executive must retire if the member has been convicted of a criminal offence that may involve a risk that he will misuse the access to working with gambling activities or if the member has unpaid, outstanding debt to public authorities in excess of DKK 100,000. If a member of the board of directors or the executive is placed under guardianship in pursuance of section 5 of the Guardianship Act (personal and financial guardianship) or section 7 (requested guardianship), the member must retire from the board of directors or the executive. This also applies if the member has petitioned for a reorganisation, bankruptcy proceedings or debt relief or is in the course of reorganisation, bankruptcy or debt relief proceedings. Domains and white labels If you wish to provide gambling services on other domains such as several white label domains, the domain must be approved by the Gambling Authority in advance. This means that you must submit a contract, information about the domain, etc. You cannot provide the game on the desired domain until you have received approval. Changes in responsible professionals If you change which professionals are responsible for:

45 daily operation, IT security, finance, system changes, combating money laundering and financing of terrorism, you must inform the Gambling Authority of the staff members entrusted with the listed areas of responsibility in the future. The Gambling Authority must approve the responsible professional. Therefore, you must submit a CV for the intended responsible professional. Read more about CVs in section Further requirements in connection with the provision of gambling services There are a number of requirements for your provision of gambling services and activities which you must meet in the daily operation of your gaming enterprise The marketing of games In addition to the general marketing rules, there are special rules for the marketing of games. The marketing of games must present the chance of winning in a correct and balanced way so as not to create an impression that the chance of winning is bigger than it actually is; must focus on games as a form of entertainment; must not be aimed at children and young people under the age of 18, neither in its communication form nor in the choice of media; must not use well-known personalities to suggest that participation in games has contributed to their success when that is not true; and must not have a content that conveys the impression that participation in games helps provide a solution to financial problems or improves the player's social acceptance. Bonus One way of marketing a website or specific games is by offering a bonus to players. This could be a welcome bonus marketed to get new customers for a website or a repayment of the fees paid by players to the licence holder for participating in the games provided.

46 It is not possible to give a clear definition of what a bonus is as bonuses are offered in many different varieties with just as many different conditions for payout. However, a bonus typically represents an object, money or a service offered to a (potential) player as consideration for an action taken by the player. The consideration may involve registration as a player on the website, depositing money into a gambling account or recruiting other players. You may market your games by offering a bonus to new and existing players. It is a requirement that the actual marketing of the bonus is in accordance with the rules described above as well as the current general consumer protection and marketing rules. In addition, it is required that the licence holder discloses information about the terms of the bonus in a clear and unambiguous manner at the time the offer is presented; that the bonus is paid into the player's account immediately after the player satisfies the terms for receiving the payment; that the player has at least 60 days to meet the terms of the bonus; and that a bonus offer cannot be given to individual players on terms that are different from offers made to other players. Irrespective of the latter requirement, the licence holder may offer a bonus to different groups of its players or potential players, for example in the form of a welcome bonus. However, this cannot be done in a manner where the real target group of the offer is so small that it constitutes a circumvention of the requirement Complaints from players It must be possible for players to file a complaint with you about your gambling services. Therefore, you must always consider an inquiry from a player who disagrees with you about the size of winnings or about the game process. This rule does not mean that it must be possible for the player to complain about your advertisement or the cleanliness of a gaming shop. It is not possible for the player to file a complaint about your decisions to the Gambling Authority. You must store the complaints and your decisions for two years. Part of the Gambling Authority's supervision of your activities may be to review these complaints. As a rule, this requirement does not apply to restricted revenue licences.

47 12.3 Suspension of a gambling account A gambling account may be suspended if the player is suspected of having unlawfully obtained winnings or violated conditions set out in the Act, the Executive Order or in the terms governing the gambling account. The player must receive a decision concerning the suspension within reasonable time. During the suspension period, it must not be possible for the player to shut down his gambling account. When the decision in the matter has been made, the player must receive this by letter or . If the suspension leads to retention of winnings, etc., the decision must be substantiated and the matter must be documented. A copy of the decision must be sent to the Gambling Authority at the same time. As a rule, this requirement does not apply to restricted revenue licences Selling land-based betting services Requirements for the shop It must be clear at your point of sale that you are licenced by and subject to supervision by the Gambling Authority. Moreover, at the point of sale there must be clear information about it being unlawful for people below the age of 18 years to participate in the games; about responsible gambling and the potential harmful effects of gambling must be provided. The information must be prepared in cooperation with a treatment centre; and about Danish treatment centres and their addresses. All the information referred to above must be available in Danish. This information must be given a prominent place at your point of sale. The information referred to in section must be available at the point of sale. The playing rules must be available at the shop where the game is sold. It is sufficient if the dealer is able to print the rules upon request from the player or show the rules on a monitor. Approval of shop managers - land-based betting A shop offering betting services must be operated by the licence holder or by a manager. If, as the licence holder, you decide not to be in charge of the physical provision of the games or if the licence holder is a company, the manager must be approved by the Gambling Authority before being hired. The manager must satisfy the following requirements: 1. not be less than 21 years of age; 2. not be under guardianship or requested guardianship (samværgemål);

48 3. not be convicted of a crime in Denmark or in other countries which may involve a risk that the manager will misuse his access to working with games; and 4. his conduct must not give reason to assume that the gaming establishment will not be run in a fully responsible way. The requirements referred to under above are the same as for individuals applying for a licence to provide gambling services, see section 7.1 for more information about this. An assessment of matters referred to in 4. above may include matters which do not entail a risk that the manager will abuse his position as mentioned in 3. above. This could involve refusing approval of a manager in case the applicant has been dismissed from a previous position due to dishonesty that did not lead to criminal proceedings but may mean that the enterprise will not be operated in an acceptable way. The Gambling Authority may also refuse to approve a manager, if the applicant is mentally unstable, has an addiction problem, is involved in crime or involved with criminal groups. It is not necessary for the Gambling Authority to identify a specific risk of criminal offences in connection with gaming activities before refusing approval. The requirement in 4. above does not only apply to the manager, but also to persons who are deemed to be capable of exercising a controlling influence on the manager. This could be a spouse, cohabitant or boyfriend/girlfriend, but the group of persons is not limited to these. Transitional period If your shop has already hired a manager to handle the provision of betting services before the Gambling Act entered into force, approval of the manager is not required. Only managers hired after the Act has entered into force are required to be approved by the Gambling Authority. 13 Annual fee You are required to pay an annual fee to the Gambling Authority for each licence to provide betting or online casino services. Calculation and payment of the annual fee The annual fee will be calculated on the basis of the gross gambling revenue of a calendar year (gambling revenue less winnings). As at 1 January 2011, the fees amount to: Size of gambling revenue Fee Less than DKK 5,000,000 DKK 50,000

49 DKK 5,000,000 to DKK 10,000,000 DKK 250,000 DKK 10,000,000 to DKK 25,000,000 DKK 450,000 DKK 25,000,000 to DKK 50,000,000 DKK 650,000 DKK 50,000,000 to DKK 100,000,000 DKK 850,000 More than DKK 100,000,000 DKK 1,500,000 The size of the fee will be adjusted on an annual basis. You must pay the fee no later than one month after the licence enters into force. The date of entry into force is stated in the licence. The first year in which you have a licence, the Gambling Authority will set the annual fee. The fee will be set based on the gross gambling revenue you stated in the budget enclosed with the application. In the following years, the fee is calculated on the basis of the preceding year's actual gross gambling revenue. If you have not provided gambling services for an entire calendar year but only for, say, six months, the gross gambling revenue will be multiplied by two. Adjustment of the annual fee The Gambling Authority will adjust the annual fee paid in the following situations: If the realised/actual gross gambling revenue exceeds the basis upon which a fee was paid, the Gambling Authority will charge an amount corresponding to the difference between the fee paid and the actual fee due. The fee must be paid no later than one month after the fee was charged. If the realised/actual gross gambling revenue realised for a calendar year is lower than the basis upon which the fee was paid, an amount corresponding to the difference between the fee paid and the actual fee due will be refunded. Repayment of annual fees paid in excess cannot be effected until after the end of the calendar year. If you stop providing games, there will be no adjustment of the fee. The Gambling Authority will carry out the calculation, charging, adjustment and repayment of the fee based on information on the gross gambling revenue reported by you and based on your tax returns to the Danish Tax and Customs Administration.

50 14 Lapse of licences A licence to provide games will lapse when one of the following conditions is met: you notify the Gambling Authority that you no longer wish to provide games; you have not started providing gambling services twelve months after you received the licence; you do not provide gambling services for a continuous period of more than six months, except when the provision is seasonal; you/the licence holder pass(es) away; you or your representative no longer meet(s) one of the conditions set out in section 7.1 above. the Bankruptcy Court, upon request from the Commerce and Companies Agency, has ordered that your company be compulsorily dissolved. Irrespective of whether the Bankruptcy Court has ordered that the company be compulsorily dissolved, the estate of the deceased licence holder, a spouse retaining undivided possession of the estate; a licence holder which has filed for a suspension of payments; a licence holder's estate in bankruptcy; or the guardian of a licence holder may continue to provide gambling services with a view to winding-up and realisation, if it is notified to the Gambling Authority within 14 days after the death, the filing for suspension of payments, the issue of the bankruptcy order, or the establishment of the guardianship. The access to continue providing gambling services only applies for six months after the event which caused the lapse of the licence. 15 Withdrawal of a licence The Gambling Authority may withdraw your licence if you or your representative: grossly or repeatedly violate(s) the Gambling Act, its associated executive orders or the terms of the licence;

51 have/has been convicted of a criminal offence that may involve a risk of misuse of the access to working with gambling activities; can no longer show that it is likely that the gambling activities will be carried on on an appropriate financial and professional basis; have/has grossly or repeatedly failed to pay outstanding taxes or have/has not provided security for such taxes, see the Gaming Duties Act and the Act on the Collection of Taxes and Duties, etc.; have/has failed to pay outstanding fees in pursuance of rules set out in section 42 of the Gambling Act; have/has unpaid, outstanding debt to public authorities in excess of DKK 100,000; have/has not applied for registration of the enterprise with the customs and tax administration within four weeks after the licence was granted; provide(s) or organise(s) games that cause significant disturbance of public order. 16 Complaints about decisions made by the Gambling Authority You can file a complaint about decisions made by the Gambling Authority with the Danish National Tax Tribunal or the courts. Filing a complaint with the National Tax Tribunal You can file a complaint with the National Tax Tribunal about all decisions made by the Gambling Authority. You do not have to pay a fee for submitting a complaint to the National Tax Tribunal. Decision of the National Tax Tribunal are final and cannot be appealed to other bodies within the administrative system, but the matter may still be brought before the courts of law, see below. When you decide to file a complaint with the National Tax Tribunal, you must be aware that: The complaint must reach the National Tax Tribunal no later than three months after you received the decision. The three-month time limit is reckoned from the day the decision is received. The complaint must be in writing. The complaint must state the points on which you disagree with the decision made by the Gambling Authority and include reasons for your views. You must enclose the decision you complain about, either the original or a copy. If a statement of facts has been prepared for the decision, you must also enclose either the original or a copy.

52 You must enclose documents that you wish to rely on as evidence in the complaint case, either originals or copies. The National Tax Tribunal is the supreme administrative complaints body for decisions made by the Gambling Authority and is composed of the president and two members. However, the president may decide that complaints about decisions made by the Gambling Authority will be considered without the participation of tribunal members. You can read more about the National Tax Tribunal at Judicial review A complaint must be brought before the courts within three months after the decision was made by the Gambling Authority. The three-month time lime also applies if you wish to bring the decision made by the National Tax Tribunal before the courts. The three-month time limit is reckoned from the day the decision is issued. If you do not bring the case before the courts before the three-month time limit, the decision will be final and it will not be possible to file a complaint against it or bring it before the courts. A case is considered to have commenced before the courts when you have submitted a writ of summons to the court. The Danish Gambling Authority may bring the case before the courts for you if the complaint is about the withdrawal of a licence to provide gambling services because of gross or repeated violation of the Gambling Act, of provisions laid down in pursuance of the Act or of the terms of the licence; the licence holder or the representative has been convicted of a criminal offence that may involve a risk of misuse of the access to working with gambling activities; or you no longer fulfil the condition of being able to carry on gambling activities on an appropriate financial and professional basis. It is not a requirement that you file a complaint with the National Tax Tribunal first. You must inform the Gambling Authority that you wish to bring the matter before the courts within four weeks after notice about the decision was given. The four-week time limit is reckoned from the day the decision is received.

53 Delaying effect of complaining When you file a complaint against a decision made by the Gambling Authority to the National Tax Tribunal or bring the case before the courts, you must be aware that the complaint does not always have a delaying effect. If the complaint does have a delaying effect, it means that you do not have to comply with the decision until your complaint case has been decided by the National Tax Tribunal or the courts. If the complaint does not have a delaying effect, it means that you have to comply with the decision even though you disagree and file a complaint about the decision. Filing a complaint with the National Tax Tribunal or bringing a case before the courts has a delaying effect if the decision is about: Decision Withdrawal of a licence Reason for the decision The licence holder or the representative is guilty of gross or repeated violation of the Gambling Act, of provisions laid down in pursuance of the Act or of the terms of the licence; has been convicted of a criminal offence that may involve a risk of misuse of the access to working with gambling activities; or no longer fulfils the condition about being able to carry on gambling activities on an appropriate financial and professional basis. Withdrawal of approval of a representative The representative has been convicted of a criminal offence that may involve a risk of misuse of the access to working with gambling activities. The representative is no longer resident in Denmark or established in Denmark. Decision about members of the board of directors or the executive board being required to retire The member has been convicted of a criminal offence that may involve a risk of misuse of the access to working with gambling activities. The National Tax Tribunal or the courts may decide not to allow the complaint to have a delaying effect for the decisions referred to above.

54 In other situations, a complaint does not have a delaying effect. In some situations, however, the National Tax Tribunal or the courts may allow the complaint to have a delaying effect in special circumstances.