Nordic countries are notorious for their very liberal approach to economics, allowing nearly every industry to operate without too many restrictions from the government. The only industry that the countries are very aversive to is the gaming industry, especially the online version of it.
The authorities don’t see the industry as too beneficial to their economies when in retrospect many countries rely on gaming companies to fuel their treasuries with billions in corporate taxes. The most famous entities that do this are Macau and Malta, that heavily rely on their large collection of gambling corporations to provide a large chunk of the country’s budget.
So why is gambling so frowned upon by Nordic countries and why is being monopolized by state-owned entities? Let’s find out with two examples of Norway and Sweden.
Sweden is getting much better
Sweden’s gambling regulations were as strict as Norway’s in the past, but now they are being forced to relieve the stress a little bit due to affiliation with the European Union.
The EU has a free gambling market policy union-wide, meaning that the member states have very little space to make their amendments. If they want to ban it completely, then they should expect some criticism. It’s what’s happening in Germany right now, the country has banned the industry completely but does not enforce the law on the citizens themselves.
After years of pressure from the EU, Sweden was forced to open its market to foreign providers not too long ago and is now being flooded with license applications.
In the past, the country had a monopolized gambling industry under Svenska Spel, which in itself was limiting the community significantly.
The issue was that even though the country seemed under the protection of the regulation, many players still managed to gamble on unauthorized websites through the usage of cryptocurrencies to hide their activities.
Once it was made clear that the regulation was not doing anything besides forcing citizens to spend money on gambling outside of the country, amendments were starting to take place. However, Norway is still falling behind in these regulations and is still doubling down on the industry.
Norway is falling behind
In Norway, the regulatory landscape is much different. Thanks to the fact that the country is not part of the European Union, it does not have to adhere to the free gambling market rules, therefore it can do whatever it wants with the industry.
Unfortunately, Norway also took the monopolization route and is sticking to it. The only companies that are able to offer gambling, betting and lottery services are state-owned. There are two of them, Norsk Tipping and Norsk Risktoto.
It’s not like Norway had never experienced the potential of the gambling industry on their soil. When slots first became available in the early 90s’ the country saw a yearly income of 200 million NOK, while in 2004 the income reached nearly 9 billion NOK. This was confirmation that the industry has a lot of potential in the country.
But in order to limit the number of citizens becoming problem gamblers, Norway introduced a ban on slots in July 2007. It has been banned ever since.
Completely different landscape in reality
Although the description of the Norwegian gambling landscape seems bleak and unpromising, the reality couldn’t be more different.
Most Norwegian citizens still have access to foreign online operators where they can accomodate their gambling needs.
The laws aren’t being enforced to a degree one may think, simply because the authorities are targeting the operators themselves, rather than the citizens. Therefore, if the citizen and the platform are careful enough to hide the transaction histories from the authorities, they can both remain under the radar.
Most do this through cryptocurrency transactions and payments, or simply using third-party payment providers such as Skrill or Neteller.
What should the governments do?
The Swedish government has already seen the potential issues their current regulation would cause if it was maintained in the long term.
For one, it’s a waste of resources, because citizens are still able to have access to those services with or without the regulation.
Next, is the ignorance of a very lucrative industry that could fuel the country’s economy or act as a secondary income source should other options fail.
The second argument is most important for Norway thanks to their relatively high dependency on the performance of Oil prices. It’s been confirmed numerous times that the NOK appreciates and depreciates according to oil prices, which is quite dangerous for a country, existing in a world which is striving for alternative fuel options.
Should electricity become more sustainable and efficient in the future, Norway’s economy would have a large chunk taken out simply due to falling Oil prices.
The gambling industry is one alternative income source that could at least mitigate such revenue losses in the future.
Will Norway follow Sweden’s footsteps?
As already mentioned Sweden, alongside other Nordic countries like Denmark is on its way towards a free gambling market for its population.
It is up to their performance for Norway to see the potential of the industry. Simply comparing an open market’s revenue source and the impact on its population is enough to see the difference and the opportunity Norway is missing out on.
Plus, tossing in that old Norway-Sweden rivalry is going to drive some political arguments in the country to open up the industry, but that’s simply a possibility.
As it stands now, most gambling operators are not recommended to cater to Norwegian customers simply due to future ramifications. If a company is seen breaking the rules today, it may be refused a license in the future, when Norway finally opens up its markets to the world.