Gambling in Norway has been a controversial issue for quite some time now. In the past, most countries in northern Europe operated state-owned companies which had monopolies in the gambling market. These companies were the only ones legally allowed to offer the customers in those countries gambling products. In Norway, two government-owned companies, Norsk Tipping and Norsk Rikstoto, were tasked with this responsibility.
While, there is some logic in allowing such monopolies in the market, as, in most cases, the profits made by these companies are channelled back to the government sectors, this model isn’t very sustainable.
The monopolies seemed to have been faring well until the online casinos became one of the most common ways for people to participate in gambling. These companies, that offer their service online can reach the population of countries that have monopolies in the industry. Consequently, the state-owned companies are losing customers as they shift to the internationally licensed online providers.
One way Norway has been able to counter this trend is by prohibiting financial institutions from providing services for such companies. As they can’t accept payments, they aren’t able to make a profit or serve their customers. Even as the general trend in many Nordic countries has been to gradually allow private companies to enter the market, Norway has been adamant in maintaining the state monopoly in its gambling industry.
EGBA files a lawsuit against Norway’s decision to block payments to internationally licensed gambling providers
The European Gaming and Betting Association has commented on the country’s decision to start blocking payments to and from internationally licensed gambling providers. The organization has even filed a lawsuit which alleges that blocking such payments would be against the Norwegian and EU laws.
Furthermore, the EGBA says the regulation wouldn’t be effective as such restriction is “easy to circumvent, virtually impossible to enforce for Norwegian banks, and creates an artificial market by shutting off EU-licensed payment service providers”.
Maarten Haijer, who is the Secretary General at EGBA commented on the issue saying: “From a consumer perspective, there are only two licensed gambling providers in Norway – both state-owned – and this is just not sustainable in an age when consumers can easily search around the internet for their preferred choice of gaming product.”
He also emphasized the need to create an environment that allows the state-owned companies to operate alongside the privately owned Norwegian betting companies. “A fundamental rethink and reworking of the Norwegian online gaming regime are therefore necessary to ensure that local and foreign operators can co-exist and have equal access to a well-regulated market which meets the realities of consumer demand for different gaming products.”
EGBA suggest that Norway introduce a licensing regime, gradually allowing private companies to enter the market
One path the EGBA thinks could work for Norway is similar to what Sweden has been doing. Sweden has started accepting license applications last month and starting next year will allow private companies to enter the gambling market.
“This can be easily achieved through a national licencing regime, such has been recently introduced in Sweden, which would enable the Norwegian gaming authority to bring the activity of foreign websites under its control, alongside existing state-owned operators. That’s exactly what the overwhelming majority of European countries have been doing, and that’s exactly what we are urging Norway to do,” – Haijer commented.
The licensing regime would bring the majority of activities in the gambling industry under the legal framework. The government would be able to collect taxes on activities that otherwise would fall outside of the reach of the law. Furthermore, the market would become more competitive as the customers would be offered many options outside of what the state-owned monopolies have.
An obvious downside is that the hold of Norsk Tipping and Norsk Rikstoto over the market would weaken and smaller profits would be channelled back to the public sectors. Furthermore, the government’s influence over the gambling market would be weakened as well.
There hasn’t yet been a response from the Norwegian regulators and as it seems now, the country is planning to go through with its plan to block payments to online gambling providers.