EGBA slams Norwegian payment blocking proposals

The European Betting and Gaming Association (EGBA) has called on the Norwegian government to ditch its plans to block payments from foreign egaming websites, arguing that a multi-license system is a more cost-effective method of dealing with illegal gambling.

Changes proposed by the Norwegian government include blocking DNS addresses for foreign operators and prohibiting transactions made via third parties by gambling companies. A consultation launched by the Norwegian government on these proposals has recently closed, with responses currently being analysed. The EGBA has long opposed these measures, filing a complaint against the scheme earlier this year.

The EGBA says that “Payment blockings of foreign websites is not a realistic or effective measure to control internet activity: they are easy to circumvent, virtually impossible to enforce for Norwegian banks, and create an artificial market by shutting off EU-licensed payment service providers.”

Instead of adopting this model of regulation, the EGBA proposes the introduction of a multi-license regulatory system, citing a recent report by Norwegian consultancy firm Menon, into the effects that the introduction of a licensing system into the Norwegian gambling industry would have.

The report provides financial estimates of the potential tax revenues of introducing a licensing scheme based on tax rates of 15, 20 and 25%. At a 15% tax rate, the licensing scheme would generate SEK 2,046m (£174.3m), while the higher tax rates of 20 and 25% would generate tax revenues of SEK 2,430m (£207.1m) and SEK 2,665m (£227.1m) respectively.

However, the estimated costs for the Norwegian regulatory authorities would remain at a steady SEK 45m (£38.4m) and the costs of maintaining the Norwegian governments’ current contribution to state-owned operators Norsk Tipping and Norsk Risktoto would also remain the same at SEK 989m (£110m) regardless of the taxation rate.

The report concludes that a licensing scheme will also ensure that a larger proportion of the Norwegian gambling market comes under Norwegian regulation, with less of a market share being occupied by unlicensed operators.

It also states that many of the current methods employed by Norwegian regulators to stop the spread of problem gambling would be more effective if more of the Norwegian gambling market was regulated and licensed.

EGBA Secretary-General, Maarten Haijer, says “From a consumer perspective, there are only two licensed gambling providers in Norway – both state-owned – and this is just not sustainable in an age when consumers can easily search around the internet for their preferred choice of gaming product.

“A fundamental rethink and reworking of the Norwegian online gaming regime is, therefore, necessary to ensure that local and foreign operators can co-exist and have equal access to a well-regulated market which meets the realities of consumer demand for different gaming products.”