Norwegian Authorities Consider Payment Block for Online Casinos

In a recent turn of events, Norway’s gambling regulator has ordered all local banks to block the flow of money from them for what they term as unauthorized online casinos.

 (photo credit: INGIMAGE)
(photo credit: INGIMAGE)
Norway has, over the years, maintained a stranglehold of a sort on the local online gambling industry. In a recent turn of events, Norway’s gambling regulator has ordered all local banks to block the flow of money from them for what they term as unauthorized online casinos. Lotteri og Stiftelsestilsynet, issued the order which required banks to stop processing payments starting from April 24th, which followed an audit of what the government termed as irregularities. 

Reasons for Considering the Payment Block

Norway has a history of maintaining strict regulations across the entirety of its gambling industry. Most activities are reserved for the state-owned Norsk tipping. While the government did, in theory, entertain the idea of possibly opening up their market to international casinos, but that didn’t materialize. In December, it was decided, or as some put, it assumed that most private casino operators would not submit to the government’s guidelines that layout social responsibility. 
According to the NGA, over USD $256 million flowed through the seven gambling companies in just this past year. To the NGA the scale and the rate at which the money flowed came as something of a shock, which lead them to ask banks to comply with their measures. 

However, the accused companies have stated that they would continue offering online gambling to Norwegians since the tactics used were illegal. The gambling companies have unanimously agreed and form a collation in a bid to ensure that they can continue to do business by offering gambling services to Norwegians. 

Online Casino Payment Block Upheld by Norwegian Court

The legal skirmish with the government ended up with the court upholding the decision. The Oslo District Court ruled in favor of the Ministry of Culture, whom it said had the powers to prevent payment processors from helping gamblers access international gambling sites that didn’t have Norwegian gambling licenses. 

Some casinos like Nettikasinot have been able to fly under the radar because of being able to accept cryptocurrencies. Cryptos are now seen as perhaps a better way for international casino operators to offer gambling products to Norwegians. It is evident that if online casinos are to operate in Norway or cater to Norwegians, they will need to adapt to using a host of cryptocurrencies. That said the use of cryptocurrencies aren’t entirely foolproof mainly because the average person still isn’t comfortable using it. 
 

Norway’s Restrictive Online Gambling Industry

Norway has traditionally enforced a very restrictive gambling law, which has often been seen as being restrictive compared to neighboring Denmark. Denmark had, in the past, made a successful transition from what was a state-run gambling monopoly to the open market, which continues to welcome international gaming operators. Norway continues to claim that they are in a struggle against international casinos, who try to influence local gamblers. Though local gamblers are less than thrilled by the country’s stance on online gambling. Many see it as a way for the government to maintain its own monopoly on the industry. 
Oslo Economics, a non-governmental agency, published a report which claimed that if the Norwegian government shifted to the open market model like Denmark, it would end up losing revenue. It could mean that a lot less tax revenue is collected and possibly lead to an increase in gambling activity which is viewed as being problematic. 

The report also stated that the government’s efforts to eliminate online gambling operations it sees as being unauthorized would be more successful because of restrictions in place that don’t allow operators to advertise locally. Not being able to market products to the local audience means that online casinos that target Norwegians will, if not already, soon run dry. Furthermore, it will discourage other online casinos from ever looking at Norway as a favorable or lucrative gambling market. 

The one drawback of the restrictions cited in the report is that local broadcasters would face losses of up to $55.5 million USD a year because of not running advertising for online casinos. So, in a way, it would hamper local broadcasters’ ability to produce new content, which in turn will affect other associated industries. 

Conclusion

Norway’s blanket yet an indirect ban on online gambling is nothing new. However, some big online casinos are challenging the government. That said, it might take a long time before online casinos are given any concessions if it does happen. The only way Norway could open up to the international gambling industry if it was lobbied by local politicians, backed by the people. Other than that, not many people are optimistic about the outcome.