The Norwegian gambling monopoly spends more than any foreign operators on advertising, but yet boldly claim they don’t contribute to gambling addiction. By taking a look at their numbers from 2019, we can safely determine that is actually true, but not in the way that you think.
In June 2020, it was revealed that they doubled their marketing spend during the corona crisis, from €1.6 million, to €3.5 million, but rest assured they did not do it to increase revenue. According to them, they felt they had to do it to protect gamblers from foreign gambling companies.
In other words, they take the safety and well-being of Norwegian gamblers very seriously. In fact, in ‘The Act of Money Games’, this is an inaugural part of the organisations two main objectives: To prevent negative effects of gambling; and to make sure that stakeholders get their fair share according to the betting key
‘The Act of Money Games § 1 (…) The law is intended to ensure that all gambling activities shall be commenced in safe conditions under public control with an aim to prevent the negative effects of gambling, while also enabling the profits to be channeled to social purposes and organizations mention in § 10.’
Before we get to the 0.26 reason to care for the monopoly, let’s explain some key terms for understanding the Norwegian gambling monopoly.
Norsk Tipping AS
Norsk Tipping AS, (the Norwegian Gambling Monopoly) was founded in 1948. It was intentionally run as a limited company, until the Norwegian State took full ownership in 1993. Originally, they only allowed betting on football and added casino games later on. They created the website www.norsk-tipping.no in 1999, and since 2001 they have had the only legal gambling website in Norway. The monopoly like we know it today is based on the singular right model.
Norsk-Tipping AS is regulated by Lotteritilsynet (the Norwegian Gaming Authority)
The singular right model
Enerettsmodellen (the Singular Right Model) is based on the assumption that gambling has the potential to create social difficulties for people who partake in such activity. There is political consensus among lawmakers in Norway that retaining the current singular right model is necessary to protect the monopoly’s customers and prevent gambling addiction among them.
The singular right model gets discussed politically from time to time, but the Norwegian Gambling Authority concluded in 2016 that keeping the monopoly and fight off foreign gambling companies would still be the best approach.
This stance was reiterated once again in 2019 when Lotteritilsynet (the Norwegian Gambling Authority), which has been trying to block payments from Norwegian banks to foreign gambling companies since 2010, blocked six of the biggest betting companies in Malta.
The singular right will not be shared in the current political landscape of Norway. And when you look at their profits, it’s hard to argue against such a stance. In 2019 Norsk Tipping delivered a result of €567-million profit, up from €316 million in 2010. Of that €513 million, €432 million are distributed according to the betting key, another term that must be explained to understand why they want to keep the singular right model.
The betting key
What makes the Norwegian gambling monopoly an anomaly in the igaming industry is their “Tippenøkkel” (the betting key). The betting key is a term used to describe how they split and channel their profits back into Norwegian sports, culture and charity organisations.
Before we get to the numbers, note that 6.4 per cent (€30.5 million) of the profit is deducted for health and rehabilitation purposes before the betting key percentages comes into effect.
The current betting key split of profits are: 64 per cent goes to sport (€286 million); 18 per cent goes to culture (€80.5 million); and 18 per cent goes to charity (€80.5 million).
By deducting the betting key split plus the 6.4 per cent for health and rehabilitation purposes from the €567 million profits, there are €81 million not included in the betting key split (€567 million - €477.5 million = €89.5 million).
0.26 per cent
The €89.5 million mentioned above, which are not included in the betting key are split in the following manner:
- €69 million goes to the “grasrootshare” (an initiative where bettors can donate seven per cent of the wager to a local sport club of their choice)
- €5.5 million goes to the bingo associations profit organisation for them to use as they wish
- And lastly, €1.5 million goes to initiatives aimed and preventing gambling addiction.
€1.5 million of the €567-million profit goes to battle gambling addiction. That’s 0.26 per cent of their profits.
The battle continues
In 2019 there was a benchmark lawsuit filed by the Norwegian company Norsk Lotteri AS when they sued the Cultural Department of Norway to challenge to gambling monopoly claiming that the singular right model does not fulfill the demands of the Schengen agreement and that the model does not prevent gambling addiction.
The Attorney General of Norway who ruled against Norsk Lotteri AS and wrote the following in his closing arguments:
“The care of gambling addicts is the most important aspect of the gambling monopoly. The regulations of the government have succeeded in preventing gambling addiction in a balanced and consistent manner. This includes preventing gambling addiction, preventing crime and the preventing gambling becoming a source of private profit.”
The battle for one of the most lucrative markets in Europe continues among the operators, licensed or not, and among casino affiliates like Casinoselfie.io.
Disclaimer: Play responsibly. Players must be over 18. For help visit https://www.gamcare.org.uk/.