Q&A: Unibet's Peter Alling on regulation in Norway

Norway has continued to stall on the long process towards a liberalisation of its online gaming framework, which could eventually open up the two government-owned monopolies, Norsk Tipping and Norsk Rikstoto, to outside competition.

Meanwhile, the size of Norway’s unregulated online market continues to grow. According to a report from Menon Business Economics, revenues grew 23% year-on-year in 2014 to NOK2.5bn (£192m) and the offshore market now accounts for more than half of all gross gaming revenues in the country.

But despite political discourse on a new licensing framework, progress continues to be slow and there are fears that little will be achieved before the country’s next election in 2017. eGaming Review caught up with Unibet’s public affairs manager for the Nordics Peter Alling to weigh-up the outlook.

eGaming Review (eGR): How far along in the regulatory process is Norway?

Peter Alling (PA): The starting point for the current debate was when a new government entered office in 2013 and said a licensing regime would be evaluated with one major requirement: that the position of the incumbent government-owned monopoly Norsk Tipping is not changed. The problem is this doesn’t work as you cannot have a licensing regime and a monopoly side-by-side.

The government has commissioned two reports, one into the financial outcomes of a licensing regime and one on the possible consequences when it comes to gambling addiction and responsible gaming. The Ministry of Culture has now sent out for public views on the reports until 1 December.

eGR: Could this kickstart progress?

PA: Unlikely. You have to ask why we need a referral period of more than five months for two small reports of limited scope. These reports look into consequences for a regulatory system which is still unknown, which is very strange. It will likely take until Q1 2016 for the public submissions to be compiled and later in the year before they are presented to the minister and parliament.

With a general election coming in 2017, it seems like the process is all about stalling. The financial report relied on data which is not up to date and was not done in accordance with the statue from the Ministry of Finance, so there are also questions over its quality. In response the industry, including Betsson, Unibet and ComeOn, asked a consultancy called Menon to do its own analysis of the consequences in accordance with the statues, and found several economic benefits for licensing.

eGR: Where does that leave the market currently?

PA: I would say the market is quite stable. We know that Norwegians are highly digitalised and as global as any players in Europe. More than 50% of the market is currently outside of Norwegian regulation. There are some attempts to crackdown on foreign operators.

The gambling authority and the media authority have come together to study TV adverts broadcast from channels based in the UK. And there has been a ban in place since 2010 on banks processing online gambling payments from unlicensed operators. However, it hasn’t seemed to have affected the offshore market, which continues to grow.

eGR: So is regulation eventually inevitable?

PA: I think in the long run Norway will have to adopt its obligations as a member of the European Economic Area. At the moment the public debate on the monopoly focuses on ensuring the revenue it distributes across Norwegian sport is maintained.

In the short to medium term many want to defend the monopoly, but market reality is that Norwegians are very digitialised. I can’t really see how market reality can be stopped. In the meantime we will see the offshore part of the online market continue to grow even if the political process stalls.