Norway's Advertising Ban Under Criticism

Liberal regulation required

NBO Secretary General Carl Fredrik Stenstrøm has sharply criticized the increasingly strict advertising bans against European online gaming providers in Norway. The industry representative believes that the developments are “disappointing, but not surprising”. The NBO is thus advocating for a shift to a more liberal regulatory model rather than attempting to maintain a monopoly on gambling.

The background is a decree presented at the end of February, with which the Norwegian government closed a legal loophole that previously allowed offshore providers to advertise in the country. According to Stenstrøm, the trade association received this “with dismay”. Especially since the liberalization of the markets is proving to be a successful model in other European countries, dissolving the state monopoly is advisable. The Secretary General stated:

“It is disappointing that authorities are not acknowledging the developments we are seeing in other countries where a licensing model has been introduced and accountability is the focus.”

Tightening of the broadcasting law

NBO's criticism relates primarily to an announced change in the law, which provides for an expansion of the broadcasting law. The reform will enable the Norwegian Media Authority (Medietilsynet) to instruct domestic TV broadcasters and Internet game developers to prevent any form of marketing by online gambling providers from other European countries. The new law is scheduled to come into force in 2020.

Previously, the jurisdiction of the Broadcasting Act only extended to television stations in Norway, not to those broadcasting to the country from other countries. For years, European operators have used this opportunity to promote their products in Norway, even though Norsk Rikstoto and Norsk Tipping are officially the only licensed operators in the country.

Norwegian gambling regulator Lotteri-og stiftelsestilsynet (Lottstift) says it launched a consultation on the issue in November 2018. Last October, the authority finally reported a 19 percent decline in advertising spending by offshore providers compared to the previous year. By July 30, 2019, advertising expenditure had fallen to the equivalent of 49.8 million euros. Nevertheless, the laws are to be further tightened, meaning that the restrictions will be even greater than the already strict ones German gambling regulation.

State monopolies are out of date

The NBO, which counts internationally renowned online gaming providers such as Betsson, Kindred Group, Cherry's, ComeOn and the Gaming Innovation Group among its members, sees the tightening as an untimely measure. Secretary-General Stenstrøm stressed that Norway must work towards developing a new regulatory model to legalize private operators, rather than trying to crack down on offshore activities.

In this regard, the expert pointed out that currently only Norway and Finland want to maintain the gambling monopoly in the European Union. However, defending a monopoly is only advisable if it benefits consumer protection. However, considering current statistics, this is not the case. Over 250,000 Norwegians use the services of foreign online gambling companies. Stenstrom explained:

"It would be much better to give these players good tools so that they can self-regulate their gambling, for example through a self-exclusion system. In Sweden, after 12 months, 48,000 players have already used such a service, a success for those who want to limit their gambling and a success for public health."

The neighboring country Sweden opened its market for online gambling at the beginning of 2019. The aim was to steer the online sector, which has been booming for years, into regulated channels and at the same time to increase player protection. For this purpose, a modern licensing system was introduced. Sweden had already started issuing its first licenses in November 2018. The prerequisite was, among other things, proof of a self-exclusion system.

A fight against windmills?

Despite the increasing popularity of online gambling, Norway has been taking decisive action against unlicensed providers from abroad since 2017. The national gaming authority had asked banks to stop transferring money via international payment providers, which was intended to stop the flow of money between online gaming providers and Norwegian players.

Specifically, it was about a ban on transfer services via the payment providers Trustly, Entercash, Earth Port, Inpay, Worldplay, Stay Cool and Betclic Everest Group, which are said to have been used primarily for deposits and withdrawals from online gambling providers. According to research by the Norwegian Gaming Authority, over 90,000 transactions were made via the said service providers in 2016IGT.

In 2018, Norway continued its tough fight. In order to protect the state gambling monopoly, the government presented a catalog of stricter measures for payment transfers in May. After a review, the controversial amendment came into force at the beginning of 2020.

The regulation now includes a general ban on payments to gambling operators that do not have a Norwegian license. Authorities said that while Norwegian banks have systems in place to block such transactions, the unlicensed operators would still be able to circumvent the measures by disguising their identities through new payment providers.

Despite the ban, Norwegian citizens still spend around 600 million euros with foreign providers, which significantly supports the NBO's call for a modern licensing system. However, as things stand, it cannot be assumed that the government will refrain from taking drastic measures. The developments remain to be seen.

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