Future legalization of gambling in Norway? Is it possible?

3. april 2019
Future legalization of gambling in Norway

Gambling is one of the most controversial topics in the Nordics. Most prominently, Sweden, Denmark, and Norway. This trio of ex-Vikings have a very similar approach to gambling regulations and have been learning from each other for a couple of years now. However, there is one extremely large difference between them, mainly Norway is the one that is the odd one out.

Pressure from a third party

The gambling industry is considered as one of the best ways to rake in tax money for the government. It practically costs nothing to let them operate, and it is extremely lucrative. Therefore, in most cases, some governments even try to turn themselves into a gambling haven. A testimony of that can be Malta for the whole EU region and Macau for Asia. However, for some countries, even the taxes are not enough to subject their population to legalized gambling. That is the case with the Nordics.

Denmark is rather soft on the regulations, so let’s focus on Sweden and Norway, but Norway in particular.

Sweden, at some point in time, will have to soften the regulations and in all honesty, they have started doing exactly that when they opened up for license applications. The primary reason could be directed to pressure from the EU. The European Union doesn’t really condone heavily regulated industries, and most of all hate when they are turned into a monopoly, which is exactly the case with Norway and Sweden.

Norway has 2 state-commissioned gambling companies: Norsk Rikstoto & Norsk Tipping, and Sweden has just 1: Svenska Spel.

However, the pressure that Sweden might experience from the EU is no applicable for Norway, for a very simple reason. Norway is not a member of the EU, however, there are other factors that may affect it.

A completely different reality

When you read about the regulations on gambling activities inside and outside of Norway, it does indeed paint a dire picture, however, the reality is completely different. The general population still has a possibility to access off-shore or even EU-based gambling sites. You see, the law does indeed exist, but it doesn’t mean that it is enforced. So a random Norwegian citizen, playing on a foreign gambling website will not have his house stormed by the local police or have his bank credit revoked, although it may be the case.

The point here is that despite the heavy regulations a normal Norwegian citizen is still able to find services to suit his or her gambling needs. There are numerous platforms out there that welcome Norwegian gamblers, even having their platforms in Norwegian and accept deposits in the Norwegian Krone.

Why softening the regulations is advantageous

There are numerous reasons why gambling is more of an asset for a country than a liability. The primary reason is of course taxes. Let’s take the USA as an example. Only the commercial Casino sector of the gambling industry managed to generate nearly $10 billion for the country in taxes back in 2017, which was already an increase. Now add to that the online slots, online betting platforms, and numerous other sectors and you easily get yourself quite a lucrative industry, not only for the government but for the operators as well.

Judging by the fact that Norway is in desperate need of revenue diversification, taxes on gambling activities may start seeing more and more feasible for the lawmakers.

Furthermore, the population is already engaged in online gambling activities. Yes, it may classify as illegal, but why waste resources in tracking, revoking and banning these sources when they can implement a tangible regulation locally, and reap the benefits. Well, there are several reasons for that.

Protect the citizens

No matter the reasons for softening the regulations, the government will always have an argument up their sleeves. It is quite a sound one as well and is very hard to counter. The argument will always be that the population will be put in danger.

The government has hundreds of case studies to back this up. Most commonly from the UK, where gambling addiction is rampant and people’s lives have been ruined by it. Gambling is usually very dangerous to the lower-middle class citizens, who can’t afford to “waste their extra income” so to speak. Therefore they tend to use the finances they need to “survive” as a means to fuel their addictions, which in the end leaves them either homeless or in massive debts.

It is very well to understand the government when they are taking the moral side of the argument. They are basically saying that although the country’s economy may benefit from additional tax revenue from this industry, the individual citizens will suffer for it, which is simply not worth it.

Gambling legalization in Norway, is it possible?

The legalization of gambling activities in Norway is a definite possibility. Although it may take a couple of years to have it implemented. You see, no matter how well the government is able to maintain the two state-commissioned companies and limit their services, there will indeed be people who squeeze through the loopholes in the law.

When there are people like this, the government is suffering these losses:

  1. They are losing potential tax money that could have gone to them to invest in various gambling addiction centers and infrastructure.
  2. The people are subjecting themselves to unregulated operators that could prove to be more dangerous than active operators in the country. Primarily scams and RNG (Random Generated Number) manipulation.
  3. People falling to gambling addiction without sophisticated institutions or NGOs to help them cope with it.
  4. The outflow of funds from the country.

As you can see, the government has quite a lot to lose if it maintains the status quo for the time being. However here are the potential problems when they start softening the regulations and legalize gambling:

  1. The population becomes more susceptible to gambling addiction.
  2. Their “Spendable income” is wasted on gambling rather than savings and investments.

No matter how you look at it, Norway loses way more if it maintains the status quo. In fact, there have already been talks amongst the lawmakers to actually allow the competition-based industry in the country. By doing so, they will be able to introduce various guidelines and regulations that are actually relevant and enforced. Things like, deposit limits and tracking, state-commissioned organizations or NGOs that specialize in gambling addiction support, to minimize the impact.

Even though these arguments may seem feasible, please look at it from a political standpoint. Which politician would be brave enough to actually put forward this idea to the general public. Doing so would incur nothing but criticism and a loss of support even IF it is a good idea. Therefore we may need to wait at least a couple of years to let the reality set in with the general population before politicians are ready to actually suggest legalization.