Abstract
Introduction
For many people, lotteries and gambling are good fun and a source of harmless excitement in everyday life. At the same time, playing games of chance can lead to gambling addiction. In Norway, online games of chance are subject to exclusivity for some state-appointed monopolies. The purpose of this regulation is first and foremost to protect vulnerable groups against the negative consequences of gambling. The profit from gambling is also a source of income for socially beneficial and humanitarian causes, sports, and culture.
The Norwegian gambling model is different from those of most other countries in Europe. Countries such as the UK, Germany, France, Italy, Spain, the Netherlands, and Denmark have introduced regulations through license systems for online fixed-odds and casino games. The Swedish government suggested a regulated license model for such games on March 31, 2017. 1 Norway, on the other hand, has upheld the model that gives a government-owned entity (Norsk Tipping) an exclusive right to offer fixed-odds and casino games online and a government controlled foundation subject to strict supervision, Norsk Rikstoto, an exclusive right to offer horse-racing games. The background for this is the belief that the model provides a higher degree of accountability and therefore protects vulnerable persons to a greater extent than a license model.
The Norwegian gambling market also consists of bingo and lotteries. This is a market that is charity-owned, but operated by private enterprises that also contribute profit to the voluntary sector.
Legal Framework
The Norwegian lottery and gaming market is subject to a national and an international legal framework. Nationally, the market is regulated by the following acts:
• Act No. 11 of 24 February 1995 relating to lotteries etc. (the Lottery Act) • Act No. 103 of 28 August 1992 concerning gaming schemes etc. (the Gaming Act) • Act No. 3 of 1 July 1927 relating to betting using a totalisator system (the Totalisator Act)
Internationally, it is the Agreement on the European Economic Area (EEA) that regulates the Norwegian lottery and gambling market. The EEA is the cornerstone of relations between Norway and the European Union. It brings together the 28 EU member states and the European Free Trade Association (EFTA) consisting of three European states, Norway, Iceland, and Liechtenstein, in the internal market governed by the same basic rules—the free movement of goods, services, persons, and capital. In principle, the development of Norway's regulatory framework for lotteries and gambling is a national responsibility, but the EEA contains overriding guidelines with a bearing on the regulations.
The legal point of departure set out in the Lottery Act, the Gaming Act, and the Totalisator Act is that the provision, marketing, and mediation of lotteries and gambling is prohibited in Norway without a permit. The three acts provide for the possibility of granting certain state-appointed providers exclusivity to offer certain forms of lotteries and games of chance.
The Lottery Act regulates private lotteries that can be held by socially beneficial and humanitarian organizations and other operators in the market. The Gaming Act regulates lotteries and gambling offered by the state-owned company Norsk Tipping AS (Norsk Tipping), and the Totalisator Act regulates totalisator games that are currently offered by the Norsk Rikstoto Foundation (Norsk Rikstoto).
According to Norwegian regulation, it is forbidden to offer gambling services without a license. Norsk Tipping and Norsk Rikstoto are the only two gambling operators with permission to operate online gambling in Norway. It is prohibited for foreign gambling operators to provide gambling services to Norwegian players from outside the border of Norway. It is also forbidden for Norwegian banks and other financial institutions to convey payment of deposits and winnings to these foreign gambling operators.
The overall objective of the regulation is to ensure that lotteries and gambling are offered in a safe and responsible form in order to limit unfortunate gaming behavior. In addition, the regulation is intended to ensure that lotteries and gambling can be a good source of income for socially beneficial and humanitarian causes, sports, and culture.
This regulation gives the monopoly operators exclusive rights to offer the lotteries and gambling with the highest turnover and prizes, and those that are associated with the highest risk of unfortunate gaming behavior.
The Norwegian gambling model entails a restriction of the free movement of services and freedom of establishment that follows from the rules of the EEA Agreement. The grounds for these restrictions are considerations for:
• Preventing gambling problems • Keeping gambling at a moderate and acceptable level in society • Channelling the desire to gamble into a safe and responsible form and ensuring consumer protection • Protecting public order and preventing crime and irregularities • Channelling the profit from gambling to humanitarian and socially beneficial causes • Preventing gambling operations from being a source of private profit
The model has been considered and accepted by the Court of Justice of the European Free Trade Association States (EFTA Court) and is deemed to comply with the EEA Agreement. 2
Knowledge about gambling problems decisive for regulation
If Norway is to achieve the goal of stringent regulation that protects players, the government needs knowledge about gaming behavior, gambling problems, and what game mechanisms can increase the risk of developing problematic gaming behavior before introducing regulatory measures. Risk factors affecting vulnerable groups' likelihood of developing gambling problems must also be known.
Norway has a long-standing tradition of conducting research that documents the extent of gambling problems and what types of games cause problems. The most recent population surveys from 2013 and 2015 3 show that the extent of gambling problems in Norway is stable. The surveys use the Canadian Problem Gambling Index (CPGI) as the assessment tool. 4 Based on nine questions, the index divides players into three categories: non-problem gamblers, risk gamblers, and problem gamblers.
Both surveys show that 89% of the players do not have gambling problems. However, the survey also shows that almost 3% are moderate risk gamblers, meaning that their behavior is potentially problematic, or problem gamblers. If the people around the player are included—family, friends, and work colleagues—a substantial number of people are impacted.
Our surveys also map who plays games of chance and whether there are risk factors for developing gambling problems. Based on research conducted in Norway, we see that young men with a low level of education who may not be participating in the labor market have an increased likelihood of developing gambling problems. The research also shows that ethnicity matters, i.e., that persons born outside Norway and the Nordic countries have a higher probability of developing gambling problems. Knowing who gambles and who is at an increased risk of developing gambling problems enable the Norwegian authorities to target the groups where measures are most needed.
Based on this knowledge and political goals, the government draws up an action plan against gambling problems every four years. The action plans ensure that long-term, systematic, and targeted efforts are made to prevent gambling problems in the Norwegian population. Norway is the only country in Europe that has an action plan against gambling problems. The plan provides access to new and more knowledge about gaming behavior and ensures that the social perspective is the main focus of the Norwegian gaming policy. In our view, there is a connection between the research results and measures in the action plan and the authorities' policy.
Responsible Tools
The Norwegian authorities have introduced a number of measures to protect players against developing gambling problems.
The most important tool the Norwegian authorities have to ensure that games of chance offered in Norway are responsible is to set concrete requirements in laws, regulations, guidelines, and gaming rules to ensure responsible gaming. The games that entail the highest risk of gambling addiction can only be offered by operators that have sufficient measures in place to ensure responsible gaming.
Today, it is mainly Norsk Tipping that offers high-risk games, and the company is therefore subject to extensive responsible gaming measures. The measures are mostly governed by guidelines and rules of the game set by the Ministry of Culture. The company is also subject to strict public control. As the owner of Norsk Tipping, the Ministry of Culture can also make requirements over and above what is stipulated. This provides authorities the opportunity to take action to ensure responsible gaming without amending laws and regulations. State ownership and the fact that the profit goes to humanitarian and socially beneficial causes, also means that the main emphasis of the regulation is on ensuring responsible gaming and not financial profit. In other words: state ownership ensures a responsible gaming perspective and a contribution from the state to the voluntary sector.
In order to ensure that measures implemented are adapted to the risk associated with different game types, Norsk Tipping performs a risk assessment of all new games, services, and forms of distribution, among other things, by using the tool GamGard. 5 This tool classifies games by the associated risk of developing unfortunate gaming behavior. In addition, the Norwegian Gaming Authority assesses each individual game in relation to the risk of gambling addiction.
Registered player—an important tool to ensure responsible gambling
The reason the government has been able to introduce so many responsible gambling measures in the Norwegian model is the registered player system. In order to play one of Norsk Tipping's games (except physical scratch cards), the player must be a registered customer. The player's date of birth and personal ID suffix is checked against the Population Register. Each player is also issued with a personal player card. This solution sets stringent requirements for the reliable identification of players. Good, reliable registration of all players is a necessary precondition for several of the other responsible gambling measures.
The system of mandatory registration means that the gambling company receives detailed data about each individual player, what games they play, and how much they win or lose. Reliable identification means that the data are complete and provide useful information about problematic gaming patterns.
The system also makes it easy to implement a number of responsible gaming tools and offer them to players. Many of the tools are mandatory, even if a player does not have a gambling problem. It is the government's belief that these tools are important in preventing many people from developing gambling problems. For those players who have a gambling problem, the tools function as a safety net.
Other measures that have been implemented to ensure responsible gaming include:
Age limit
Players must be 18 years old to play Norsk Tipping's games.
Different limits
What separates Norway from other countries is that it is mandatory to set a limit for how much you can lose. Each player must define such a limit before they can play.
Different limits have been set for Norsk Tipping's games that are intended to reduce the risk of unfortunate gaming behavior. Maximum loss and stake limits have been set for the high-risk games that limit how much money a player can gamble and lose on the games. In addition, players must define their own personal limits within these maximum limits.
For Norsk Tipping's online casino, players must also define a personal limit for how much time they can spend playing. These tools limit the players' losses and makes them aware of how much time and money they spend on gambling. Players may change their personal limits. If a player wishes to adjust a limit downwards, the new limit applies immediately. If the player wishes to raise their limit, the adjustment will take effect after a certain amount of time.
Total loss limits are the most recent responsible gaming measure in the regulation of Norsk Tipping's games of chance in Norway. The total loss limit includes all Norsk Tipping's games and is set at NOK 20,000 (USD 2,311) per month. Lower total loss limits have been set for individual high-risk games. In addition, players must define a total loss limit for all games provided by Norsk Tipping.
Exclusion
Players can exclude themselves from all Norsk Tipping's games or from one or more categories of games. The exclusion cannot be reversed until a minimum of one year has passed.
“No thanks list”
The “No thanks list” contains Norsk Tipping's self-defined marketing rules. The rules mean that Norsk Tipping cannot offer commercial or financial incentives to individual players in the form of
• Registration or reactivation bonuses
• VIP levels for selected groups of customers
• Incentives based on gaming activity
• Automatic games (autoplay)
• Direct marketing targeting players who have excluded themselves, or who are registered with yellow/red status in Playscan. 6
The “Spillevett” website
Norsk Tipping has created a web page called “Spillevett” (“Sensible gaming”). 7 Here, players can find tools and other information that will help them to achieve healthy gaming behavior. The web page and the tools are easily accessible via all sales channels.
Other responsible gaming measures
• Analysis of customer behavior using the Playscan tool
• Mandatory e-learning program in responsible gaming that employees must take every two years
• Research and expertise that contribute to knowledge about gambling and the prevention of gambling problems
• Certification 8
Challenging the Norwegian monopoly model
Norway also has an unregulated market consisting of foreign gambling companies that offer online gambling to Norwegian players from abroad. These companies are not subject to the same stringent responsible gambling regime in their domiciles as Norsk Tipping is in Norway when it comes to total and mandatory loss limits. The population surveys from 2013 and 2015 also show that many Norwegians with gambling problems today have problems related to fixed-odds and casino games offered by these unregulated providers. 9
Some foreign gambling companies want Norway to introduce a license model, like most other European countries have. So far, there has not been political will in Norway to change the Norwegian gambling model. A key question in this context is whether foreign gambling companies would be willing to subject themselves to regulatory measures as stringent as the ones that currently apply to Norsk Tipping, if arrangements were made to introduce a license model. Or would a license model contribute to undermining considerations of responsible gambling at the expense of financial profit? There are several factors at play here:
• It will be challenging to maintain an equally comprehensive responsible gambling regime, with mandatory maximum loss limits, no bonuses, and marketing restrictions, in a license model. • In the worst case, there is the risk that only a few gambling companies would apply for a license, while others remain outside the system and continue to offer unregulated games. • The monopoly model makes it possible to implement measures quickly, if necessary. • Population surveys conducted in Norway show that the proportion of people who have gambling problems remains stable. • Special interest organizations in Norway say that people who develop problems very quickly also develop very serious problems. The monopoly model and the responsible gaming regime protect players against this effect.
Conclusion
Norway has a regulation system that aims to ensure that lotteries and gambling are offered in a safe and responsible form, while at the same time helping the voluntary sector realize its objectives.
In our view, the Norwegian gambling model largely succeeds in preventing Norwegians who play high-risk games offered by Norsk Tipping from developing unfortunate gaming behavior. It could be argued that as the Norwegian online gambling market is not subject to a licensing regime like in most EU countries, foreign providers of online gambling will most likely continue to provide online gambling services to Norwegian players/customers from outside the borders of Norway. This represents a breach of the Norwegian law and creates an illegal market for such services, which impedes Norwegian authorities from thoroughly regulating the whole online gambling market for Norwegians.
There has been political discussion in Norway as to whether the Norwegian gambling model needs to be changed so that foreign gambling operators can get a license to offer online fixed-odds and casino games. On May 2, 2017, the Parliament decided to maintain the Norwegian gambling model that gives Norsk Tipping exclusive rights to offer these games in Norway.
When it comes to the future regulation of the Norwegian gaming market in the years ahead, the authorities will introduce more measures to protect the model and players against developing gambling problems.
Footnotes
2
The Ladbrokes judgment, Case E-3/06, [2007] EFTA Ct. Rep. 86.
3
5
Developed by Dr. Richard T.A. Wood and Dr. Mark D. Griffiths.
6
Playscan is a tool that increases players' understanding and awareness of their own gaming activity. A green traffic light means that a player's gaming activity is stable, a yellow light means that there is a certain risk associated with the gaming activity, and a red light is a warning that the player is at risk of developing or already has developed a gambling problem. Playscan was developed by the Swedish company Playscan AB, an expert in gaming behavior. The tool is research-based and has been implemented by a number of gaming companies in the Nordic countries and Europe in recent years. For more details, see 
.
8
European Lotteries and Toto Association (EL) and World Lottery Association (WLA)—responsible gaming standards.