According to Maarten Haijer, Secretary General of the European Gaming and Betting Association (EGBA), Norway has lost control of its online gambling industry due to the existence of a state monopoly.
Norway’s two operators, Norsk Tipping and Norsk Rikstoto, are both state-owned under the new scheme, with the former in charge of lotteries and sports betting and the latter in charge of horse race wagering.
Moving away from state monopoly
In an article published on the official EGBA website, Haijer stated that it is unsurprising that Norwegian bettors are moving away from the state monopoly and toward foreign operators, who provide them with “better choices and prices” than the domestic regime.
He explained: “It is estimated that 66 percent 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.”
‘Think of another fallacy’
Haijer compared the mythological tale of Loki’s wager to the conventional Norse tale of Loki’s wager, noting that the mythological story made him “think of another fallacy” in terms of Norway’s online gambling industry.
“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,” he remarked. “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.”
Norwegian bettors are described as “internet savvy,” according to the study. According to Haijer, the country’s gambling customers are “sensitive to prices and innovation,” and as a result “actively search greater choice and alternatives” to the state monopoly’s offerings – choices and alternatives that are readily available online.
The Secretary General argued that instead of a state monopoly, Norway should introduce a multi-licensing scheme, citing the popular models in Sweden and Denmark as examples.
“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.”
He stated that by implementing a multi-licensing model, Norway would be able to reduce the number of bettors switching to foreign online operators from 66 percent to 5 percent within the first year of implementation.
Haijer reflected on the aforementioned Danish and Swedish markets, where state monopolies were replaced by a multi-licensing model: “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.”
He said that while he believes Norway’s monopoly scheme does not protect gamblers any more than other European countries that use a multi-operator market, “this brings into question the success of the country’s monopoly model.”
Establish “necessary competition and choice”
The scheme would establish “necessary competition and choice” by moving to a multi-licensed sector and enabling businesses to acquire licences, encouraging gamblers to choose to bet with domestic operators rather than foreign firms that are not regulated by local authorities.
As a result, bettors in Norway would be better protected, as licenced firms would be forced to follow a “range of regulations and consumer protections.”
The relevant regulatory body will regulate and enforce compliance with these laws, ensuring that “the responsibility for controlling the level of consumer protection remains with the authorities.”
Haijer concluded his statement by saying: “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 chastised Veikkaus, Finland’s gambling monopoly, for providing little incentives to both bettors and the government, and called on the Finnish government to ‘fix’ the country’s gaming policy.