Maarten Haijer, Secretary General of the European Gaming and Betting Association (EGBA) has stated that the continued adherence to a state monopoly is resulting in Norway ‘losing control of its online gambling market’.
Norway’s current system has two state-owned operators, Norsk Tipping and Norsk Rikstoto, which operate lotteries and sports betting, and horse race wagering respectively.
On the EGBA website, Haijer stated it’s ‘not surprising’ that Norwegians are moving away from the state monopoly and are instead looking at international operators which offer them ‘better choices and prices’ in comparison to the domestic system.
He stated: “It is estimated that 66% of Norway’s online gambling activity now takes place on international websites, meaning the country has lost control of over half of its online gambling market, is losing out on about 2bn NOK in additional tax revenues each year, and many of its gamblers are not protected by Norwegian laws.
“This is a significant problem for ensuring the monopoly does what it says: controlling online gambling and protecting players. If Norwegians play with international websites there is no way for the state to control their activity or protect them.”
Making a comparison to the traditional Norse tale of Loki’s wager, Haijer noted that the mythological story made him ‘think of another fallacy’ with regards to Norway’s online gambling market.
The Secretary General said: “Norway justifies its monopoly under the premise that the state is better placed, than private companies, to control online gambling and protect players from problem gambling.
“But this argument, like Loki’s Wager, is based on a fallacy: it’s a country’s regulations and consumer protections which control online gambling and protect players, not whether there is a monopoly or not.”
Describing Norwegian bettors as ‘internet savvy,’ Haijer outlined that the country’s gambling consumers are ‘sensitive to prices and innovation’ and they ‘actively search for greater choice and alternatives’ to those offered by the state monopoly – choices and alternatives that are easily accessible online.
He argued that instead of a state monopoly, Norway should instead implement a multi-licensing system, pointing to Denmark and Sweden as successful examples of this.
“In a multi-licensed market, licensed companies must apply a range of regulations and consumer protections which are part of the local licensing rules,” he added.
“Compliance with these licensing rules is monitored and enforced by the country’s gambling regulator, ensuring that the responsibility for controlling the level of consumer protection remains with the authorities.”
The Secretary General added that the introduction of a multi-licensing model would enable Norway to ‘significantly reduce’ the number of bettors shifting to international online operators from 66% to 5% within the first year of implementation.
Citing the multi-licensing models in Denmark and Sweden, he commented: “While the regulations in both countries are not perfect and can be improved upon, the introduction of multi-licensing allowed them both to significantly reduce the amount of their online gambling activity taking place on international websites and are now in a much better position to control their online gambling markets.
“They’re now generating more tax revenues from online gambling and more of their gamblers are protected under their national laws, which is particularly important for addressing problem gambling.”
Expressing the view that Norway’s monopoly system does not protect the country’s gamblers any better than other European countries which utilise a multi-operator market, he claimed that ‘this brings into further question the success of the country’s monopoly model’.
By shifting to a multi-licensed sector and allowing companies to obtain a license, the system would create ‘necessary competition and choice’ to encourage gamblers to continue to bet with domestic operators, rather than via international firms which fall outside of the supervision of local authorities.
In turn, Haijer believes this will better protect bettors in Norway as licensed companies would have no choice but to obey a ‘range of regulations and consumer protections’.
Compliance with these rules would be monitored and enforced by the appropriate regulatory body, which would ensure that ‘the responsibility for controlling the level of consumer protection remains with the authorities’.
Concluding his statement, the Secretary General said: “The time has come for Norway to have a fundamental rethink about how it regulates online gambling. It’s clear that Norwegians increasingly choose not to play with the monopoly, and it’s better to meet, rather than ignore, their demand for alternatives.
“Experience shows us that online gambling monopolies inevitably fail, and Norway should look to Denmark and Sweden where multi-licensing – while not perfect – proved to be a much more optimum model for controlling online gambling. Only by doing the same can Norway correct the fallacy at the heart of its monopoly and failing online gambling regulation.”
Haijer had previously criticised Veikkaus, the gambling monopoly of Finland, for offering little benefits for both bettors and the government, and called on Finnish authorities to ‘fix’ the country’s gaming policy.