Norway’s Central Bank Questions Offshore Gambling Block

view of Bruges, Bergen, Norway

Norway is very protective of its gambling industry and has a state monopoly in place. This approach is being more scrutinized nowadays. However, Norway recently implemented further measures to block payments to offshore gambling companies. Now the Norwegian Central Bank has questioned this approach.

History of gambling in Norway

For the most part, gambling is illegal in Norway. Only Norsk Rikstoto and Norsk Tipping are allowed to offer any form of gambling services in the country. Norsk Tipping offers sports betting, lotteries, and Keno, among others. Norsk Rikstoto offers betting on horse races.

Both are wholly owned by the state, and there are strict rules about what hours that bets can be placed. There are also betting limits.

Since 2011, players need to be at least 19 years old to participate in any of the betting service offered by Norsk Tipping, except for scratch cards.

Lotteries are also strictly controlled, but special licenses can be sought by parties who are operating socially oriented services because the money that is garnered through these lotteries must be used to benefit society.

Slot machines in Norway saw enormous levels of growth early in this century. Slots-related revenue was just £18.4m ($23.7m) in 1990, but this grew to £2.4bn ($3.1bn) by 2004. This accounted for 64% of the gross revenue in the entire gambling industry that year, which made the authorities sit up and take notice.

The Lottery Act of 1995 only allowed charitable organizations to operate slots, but it failed to prevent private organizations from running slot machines and taking profits when they operate them on behalf of charities.

This led to the authorities cracking down on the slots industry by putting stricter requirements into place. By July 2007, slots were entirely banned in the country. There are some interactive video terminals (IVTs) in the state, but players need to have special permission to use them.

Online gambling outside of Norsk Tipping games is illegal, and the country makes concerted efforts to shut down illegal foreign operators.

The government introduced a bill in 2010 that required every bank in the country to prevent Norwegians from using debit cards or credit cards in online and offline casinos worldwide. Citizens in Norway are even required to declare any gambling winnings they reap worldwide.

Recent changes in Norway

While Sweden has recently ended its state-run monopoly on gambling, Norway is still adamant in sticking to that approach.

Sweden, like Norway, had been criticized by the European Union Commission for its state-run monopolies on the gambling industry. In June 2018, a new law allowed foreign online poker operators to offer their services to Swedish residents.

In the past, countries with protectionist gambling sectors wanted to offer gambling only if they could put the revenues into socially responsible initiatives. They didn’t want foreign operators to take a large slice of the revenues out of the country.

However, with the popularity of the internet, it has become harder and harder to police in recent years because there are many ways in which Norwegian gamblers can use foreign operators. Therefore, the costs outweighed the rewards for countries like Sweden and, with significant sums being driven to offshore companies that weren’t paying taxes in Sweden, the time was right to end the state monopoly.

It was only recently that the Norwegian government submitted new gambling regulations to the European Commissions, under which the country would maintain its monopoly system for years to come.

Additional measures will allow the country’s authorities to deal with illegal foreign operators targeting Norwegian residents. They give banks greater scope to block any payments offshore gambling operators, and the banks are urged to submit information to the NGA if they are asked for details about particular customers believed to be involved in unlicensed gambling.

DNS blocking would be brought in as part of these new measures to prevent people in Norway from even accessing gambling websites that are operated abroad, and the Gaming Authority would have the ability to look at every bank’s annual report to try and spot any suspicious transactions.

However, the Norwegian Central Bank has sought clarity for the banking sector, as many believe that these proposed regulations will be impossible to follow.

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