Norway Submits New Gambling Regulation for EC Consideration

Norway Submits New Gambling Regulation for EC Consideration

The Scandinavian nation of Norway has submitted proposed new online gambling regulations to the European Commission. These rules, which aim to cut down on offshore wagering by Norwegians, will only go into effect if approved by the EC. The document was received by the EC on June 6, and it may take up to three months for the body to render its decision.

About the Anti-Gambling Laws

Norway isn’t seeking to completely overhaul its existing regime of gaming statutes. Rather, it’s making minor modifications to enhance their effectiveness.

The focus of the new restrictions is on payment processing, which appears to be a favorite target of governments worldwide as, for example, with Black Friday in the United States in 2011. Credit card issuers and banks that permit Norwegian citizens to make transactions to known foreign gambling companies would be criminally liable under the new regulations.

The most controversial part of the proposal, however, is likely the data reporting that banks would have to undertake. Under the terms of the new law, they would be required to share with the Norwegian Gaming Authority (Lotteri – og stiftelsestilsynet) certain information regarding gambling transactions attempted by their account holders.

Current legislation only blocks transactions that are identified as being made for the purposes of remote gaming. The new rules would toughen up this restriction by disallowing any transaction involving firms known to offer online gambling to Norwegians whether or not a specific transaction can be shown to relate to gambling.

Part of a Broader Package

The finance-related measures forwarded on to the European Commission for approval are only part of a larger program of anti-gaming laws enacted by the Norwegian parliament (Storting) in early May. These texts were drafted and backed by a coalition of four parties: the Labor Party, the Socialist Left Party, the Christian People’s Party, and the Center Party.

The Gaming Authority was granted new powers to crack down on marketing and advertising by international gambling enterprises within the country. Also, DNS blocking of online poker, casino, sports betting, and other wagering websites was approved.

This DNS blocking is a watered-down version of an initial plan to block IPs. Under the DNS blocking system, visitors to unauthorized websites will see a pop-up alerting them to the fact that the site they’re browsing is not licensed to operate in Norway. However, they will not actually be prevented from viewing the content on these pages.

Norwegian Gambling Situation

The present framework for real money gaming in the Land of the Midnight Sun basically prohibits all forms of gambling with limited exceptions. The main laws governing these activities are:

– The Norwegian Totalisator Act of 1927
– The Norwegian Gaming Act of 1992
– The Norwegian Lottery Act of 1995

Together, these pieces of legislation make it against the law for any unlicensed entity to provide gambling to residents of Norway. The two main organizations permitted to conduct gambling on a large scale are Norsk Tipping and Norsk Rikstoto.

Norsk Tipping offers lotteries, casino games, and sports betting. Many of its products are available online and through mobile. Norsk Tipping is a state-owned corporation that plows its profits back into culture and sport.

Norsk Rikstoto manages pari-mutuel wagering on horse races. It’s a private company, but it pays a small percentage of its turnover to the state.

Neither Norsk Tipping nor Norsk Rikstoto is in the business of hosting poker games whether online or live. Limited gambling is allowed to charitable organizations that obtain the appropriate licenses, and so there are occasional opportunities for Norwegians to play cards in brick-and-mortar settings. Additionally, home games are permitted so long as such games don’t constitute a business.

Previous Attempts to Stifle Online Gambling

Norwegian officials have tried to go after unlicensed internet gaming providers before. In March 2017, the Gaming Authority identified seven payment processors that it claimed were facilitating online gambling transactions, and it ordered banks to stop approving their transactions. In December of 2017, for instance, bank accounts owned by Magyar s.r.o. (Trustly AB) and Entercash Ltd were effectively blacklisted from the country, and banks ordered not to handle any business related to these accounts due to their having processed online gambling payments in the past, in defiance of the regulator’s instructions.

However, the resolution of this case seems to have been that the targeted organizations opened up other accounts using different registration details and simply carried on as before.

Many industry observers expect the new regulations to be similarly toothless. From prepaid debit cards to crypto-currencies like Bitcoin, there are already a wide array of payment channels available for internet gambling that bypass the traditional financial infrastructure almost completely.

Licensure Down the Road?

Bills have been discussed that would establish a licensing regime for outside groups to run state-supervised Norwegian online gambling, similar to the way it works in France or the United Kingdom. None of these schemes have gone much beyond the planning stages.

Critics of the way Norway deals with gambling contend that the country is violating trade rules by granting Norsk Tipping an effective monopoly. Indeed, this government-owned business generated 5.3 billion Norwegian kroner ($649 million) in profits in 2017. By disallowing offshore competition, gambling firms argue, Norway is using unfair practices to protect this lucrative cash cow.

Thus, we can expect demands for legalized online gaming to increase going forward. However, barring any ruling that Norway is violating its treaty commitments, it’s tough to see this movement gathering enough political momentum to achieve much success in Norway.