While gambling reforms are sweeping across Europe and most jurisdictions are considering some form of multi-licensing system, it is as if time has stood still in Scandinavia. Of the four Scandinavian countries, all but Denmark have been combatting black market operators and have resisted calls for multi-licensing of remote gambling. Denmark has bucked this approach by adopting an industry friendly multi-licensing gambling regime which offers attractive conditions for international gambling operators providing gambling services to Danish players.
There are at least three significant reasons why remote gambling operators take (or should take) a close interest in the Scandinavian market:
1) The gambling spend per capita is relatively high by European standards (Norway: €226 per person annually and €237 in Sweden);
2) The unregulated remote gambling markets are sizeable with approximately €600m spent in Norway and €350m spent in Sweden each year; and
3) Internet penetration and mobile usage is among the highest in the world, which make the markets very accessible for remote gambling operators.
As demand has increased and with activity in the “black market” swelling, the governments in Finland, Sweden and Norway appear to have concluded that some measure of reform is necessary.
While Finland has chosen to continue with a monopoly model of regulation with tight controls and limited advertising spend, the governments in Sweden and Norway are still considering how to counter the black market. There is growing recognition that the current regulatory regime is not sustainable and that state-revenue will gradually reduce if no action is taken but the governments’ preference would be to try and maintain the monopoly system, instead of introducing a multi-licensing system.
In Sweden, there has been a long-standing debate as to how to counter the unregulated gambling market, which accounts for approximately 15 % of the total gambling spend. A working group under the Ministry of Finance was formed to assess what would be the potential financial impact of Danish style regulation of the Swedish market. The study is titled “What is the cost of controlling the Swedish market” and is expected to be published by the end of 2014.
The Swedish government has been reluctant to propose changes to the existing regulation and in April the Finance Minister said that no decision would be taken until the end of 2014. Since then there has been a change in government to a Social Democratic government and, at the time of writing, the new Finance Minister has still not been appointed. It is, therefore, unlikely that any decisions will be taken this year.
In Norway, there is a very similar situation where the government is concerned about the growing unregulated remote gambling market and where discussions about re-regulation of the Norwegian gambling legislation have begun.
The Norwegian government is initially trying to counter the unregulated market by allowing the Norwegian State Lottery, Norsk Tipping, to operate online casino games but the government has at the same time initiated a financial study to look into the financial impact of a new gambling regulation with multiple licences. The findings of the study will be published in the spring of 2015 and will be followed by two other studies considering the social impact of a new gambling regulation and anti-money laundering measures.
The government expects the studies to be completed by the end of 2015 and only then will the Norwegian government decide on further steps.
It is clear from all of this that Finland, Norway and Sweden are still undecided as to how to deal with the thorny issue of reforming gambling regulation but is hoped (but not guaranteed) that we will have more answers and less debate in 2015.