This is a guest contribution by Giorgi Mikhelidze. If you would like to submit a contribution please contact Bill Beatty for submission details. Thank you.
Gaming in the Nordics is not considered as a topic of every-day life. In fact, it is on the controversial side due to the heavy regulations and restrictions that the governments have imposed on the industry. Although there are quite a lot of countries that classify as Nordic (yes even Estonia sometimes), I’ll be focusing on the most restrictive ones such as Sweden and Norway.
However, there may be some distinctions with Norway as it is the hardest market to enter, therefore the most focus will be given to them.
The gaming scene in the Nordics
When we think about the gambling industry, it is usually considered as a boon to the local economy, as the government has no real costs at allowing the companies to operate, while it has quite a lot of revenue from simply taxing those casinos.
In fact, most of the countries that have dedicated parts of their GDP to casinos, find that gambling and betting turn out to be their largest sources of revenue. Therefore it’s hard to understand why countries like Norway and Sweden would refuse such a stream of funds. Especially Norway, as it is in desperate need of economy diversification due to oil price reductions in the future.
One argument that experts provide is that these countries are extremely conservative when it comes to gambling, and would much rather have their population invest in the financial markets than gamble away their extra funds. The purchasing power of the consumer is the usual argument to arise. But isn’t purchasing power dedicated to providing funds for a local company? Aren’t casinos companies as well? These are the question-answers that we usually hear.
For Norway, it’s much easier to retain their strict regulation of the gambling market as they are a relatively independent European state. For Sweden though, it’s much harder due to pressures from the EU.
The EU has quite an open policy when it comes to gambling and has been seen criticizing countries like Germany for its strict regulations. For them, the growth of the industry is an asset rather than a liability, as it increases a member state’s economic power. Sweden has started to give way to EU demands and has issued some licenses, but Norway isn’t even budging.
What is it like for gambling companies?
Norway is a very hard to understand phenomenon. It is considered as one of the most libertarian countries, while also having one of the most monopolistic industries in the world.
Currently, there are only two companies who have the right of providing gambling services to the local population:
● Norsk Rikstoto
● Norsk Tipping
Any other casino or online gambling platform is forbidden from catering to the local population.
With Sweden, it’s a bit different. The country used to have the same situation, although they had only one state-owned company that had the right to offer to gamble. It was Svenska Spel. But now, the country has started accepting license application from offshore companies willing to enter the market.
Overall, things are improving for most of the Nordics, while Norway continues to lag behind in that sense.
What’s it like for the players?
Although all of the points listed above shine Norway in not the best possible light, it’s important to note that it’s not that bad.
The law exists, yes, but it seems like nobody is really enforcing it to an extent that it affects the local market. For example, most Norwegians are free to register on EU-based platforms that manage to go through the national firewall, and even if they’re discovered, no legal action will be taken against them.
Much like every other country, Norway is focused on removing the service providers rather than its own citizens.
What does this tell the offshore companies? It says that the demand is there. Should the regulations be lifted, all of the willing casinos can expect a healthy market of Norwegians willing to participate in the industry. But will the ban be lifted? It remains to be seen.
How to convince the government to lift the ban
The efforts of convincing the government have fallen on deaf ears for years now. But as the global switch from oil to electricity becomes ever more realistic, Norway starts to get more and more desperate to find alternative sources of revenue.
Economic danger
For one, the dependency of the Norwegian Krone on oil prices needs to be considered. If they drop rapidly, the currency is sure to follow and the country will take a massive economic hit.
The best way to convince the government to lift the ban is to supply them with case studies. Let’s say the USA as an example. The country is able to generate more than $10 billion from offline casinos in taxes alone. And those casinos are available in only a handful of states. Having the gambling industry be regulated and allowed nation-wide, would increase that number by more than 5 times.
Statistics
Next would be the display of statistics for the Norwegian population. If one company were to do research about how many Norwegians gamble regularly, it would be much easier to get the point across.
For example, if half the population has engaged in some sort of online gambling with an offshore company, not only is that a loss of funds for the country, but a loss of opportunity for taxing that very same company. Sooner or later, Norway would see that by imposing such a harsh ban, they’re not only losing money but not accomplishing too much in the process.
Furthermore, it would be a nice outline of how the resources spent on banning offshore companies is wasted, and how simply introducing a more forgiving regulation would be much more effective.
Comparisons
Another option would be to wait for Sweden’s statistics once the companies move in the country. After a year or so of operation, we’d be able to get the scope of expected tax revenue, the effect on the population, as well as the funds spent in the industry within a year. If they are in the manageable margin, it could be pitched to Sweden’s neighbour with much more clarity.
Financial danger
Last but not least, would be the argument about the unregulated nature of Norway’s gambling industry. This argument could be a follow-up of the statistics argument as it will help to outline the issue much more clearly.
By not regulating the gambling market on a national level, Norway is subjecting its population to shady operators, which catty much more risk in terms of loss of funds, or refusal for withdrawals.
By them refusing to regulate trustworthy companies that have licenses in places like Malta or the UK, they are forcing their population to find alternative methods. Methods which often end in disaster as customers lose all of their deposit without placing a single bet.
Are the Nordics worth it?
Calculating the costs of operating in Nordic countries is a pretty hard thing to do. But what we can agree on is that it is no walk in the park. The minimum wages and the real estate prices in the countries are quite high, but the potential for income rivals the costs on an equal level. In fact, it surpasses it by a large margin.
There is no question that a company would be able to find some kind of value in countries like Sweden and Norway, all that’s needed to be done is to implement a friendly environment.
Having costs added to costs because of regulation will definitely not be a permanent solution for the operators, although it could be used as a filter for smaller, less capable companies.
At the moment of writing this article, starting a gambling business in the Nordics is not considered to be profitable at the start. Sweden is in the process of drafting a regulation which will not only attract foreign companies but also keep them within the ramifications of the law.
This type of regulation is quite hard to do unless you have a population who is interested in the industry.
With Norway, it’s a completely different story. Most casinos have the opportunity to cater to the Norwegian population, but if found out, it would jeopardize their chances of acquiring a license once the ban is lifted, and it will be lifted once we have the statistics from Sweden.
At this point in time, the best way to offer gaming services to either of these nations is to provide crypto payment options.
With cryptocurrencies, not only will the population have the opportunity to avoid fines from the government from gambling, but the companies themselves will be able to dodge the wrath of the regulation.
About the author:
Giorgi is a Georgian Copywriter, programmer and marketing enthusiast. He also follows a lot of the development in the financial as well as the gambling sector. His insight helps him craft educational articles for all of his readers to enjoy. Read more from Giorgi at https://norskecasino.casino/
